The potential for bank-branded mobile wallet growth lies in how well financial institutions can provide value that exceeds what is currently available from non-traditional providers.

Mobile wallets are increasingly becoming a part of the daily lives of the digital consumer. Beyond mobile payments capabilities, the non-payment side of mobile wallet links loyalty cards, coupons, boarding passes, ID cards, event tickets, alerts and notifications.

It is no wonder that Millennials and other digital consumers are embracing this mobile tool. The question is, when will the payment component of the mobile wallet become mainstream … and which wallet alternative will be the payment tool of choice?

In the CCG Catalyst Consulting Group study, “Millennials and Mobile Wallets,” the similarities and differences between Millennials and non-Millennials are examined. Since Millennials tend to lead other demographic segments in acceptance and use of digital banking tools, this research provides a good view into the future of mobile wallets as well as payment brand acceptance.

The research found that Millennials and non-Millennials are similar in their desire to monitor and manage their finances. Both segments are also shifting their payment preferences, with cash continuing to be less important to both segments.

The similarities end there, however, since the level of income and complexity of money management differs between the two segments as do the tools used to accomplish money movement and money management activities.

Much of the difference has been driven by the early and almost universal acceptance and use of smartphones. Millennials have grown up with digital, and 93.9% of Gen Y respondents have a smartphone. As a result, they use their phones heavily and integrate mobile tools in every part of their daily lives.

Millennials and Money Management

According to the CCG Catalyst study, Millennials keep a watchful eye on spending and paying bills (64.7%), with just over half (53.7%) preferring to use a debit or credit card for purchases. Whee it comes to cash, 21.8% will never carry or use cash for purchases.

In addition to trying to monitor their spending, Millennials also watch their bank balances very carefully, with half (50.4%) checking their balances daily. To save money, some Millennials (45.1%) use coupons and loyalty points. Somewhat surprisingly, only 39.7% of Millennials prefer using PayPal to make online purchases.

In a previous study conducted by CCG Catalyst in September, 2015, “Millennials and the Bank of the Future”, it was found that only 39% had been to a physical bank the week prior to taking the survey, and 21% of the respondents had not visited a branch in the previous 6 months. Finally, 68.6% of Millennials use a mobile banking app, with 49.1% using the mobile app frequently, 19.5% occasionally and 10.1% never using a mobile banking app.

Millennials Use Non-Bank Mobile Wallets

When CCG Catalyst asked Millennials about their preference for a mobile wallet, half (49.5%) mentioned PayPal. Google Wallet was mentioned roughly half as often (25.4%, with 19.2% Millennials choosing Apple Pay ...