Consumers have become increasingly aware of the benefits of emerging payment methods and are accustomed to using different payment mechanisms in various scenarios. Gen Z, in particular, is especially payments-savvy—one of the reasons Mastercard is launching its One Credential platform.
One Credential allows customers to choose from multiple payment methods like debit, credit, buy now, pay later (BNPL), and prepaid, all within a single interface. Users can manage their selection of payment options through Mastercard’s online platform or app.
The payments giant believes this solution will appeal to younger consumers, who are digital natives and prioritize personalized experiences. This preference for experiences has fueled a resurgence in shopping at physical malls among younger consumers. However, Gen Z hasn’t abandoned e-commerce; instead, they are blending aspects of in-store and online shopping to create a hybrid shopping experience.
Structuring Credit
Another key aspect of One Credential is that it will provide structured credit solutions aimed at helping Gen Z build their credit scores and improve their creditworthiness.
Gen Z consumers haven’t been hesitant to embrace credit cards. A recent study by the Federal Reserve of Dallas found that younger consumers in Texas are more likely to own credit cards than previous generations at the same age and tend to use them more frequently.
Roughly 60% of Gen Z respondents reported having at least one credit card in their early 20s, with nearly a third saying they had a credit card that was 75% or more of its credit limit.
Filling a Role
Mastercard’s latest effort represents a growing trend in the financial services industry, where organizations are adapting their models to align with Gen Z’s preferences. Just as Gen Z adults are becoming more active with credit cards at an earlier age, younger consumers are also starting their investment journeys sooner. The digital-first mindsert of Gen Z investors has driven a shift toward AI tools and self-directed platforms.
Gen Z is also influencing a shift toward mobile and digital banking solutions at traditional financial institutions. While technology solutions are important, many younger consumers are also looking for guidance—an opportunity that financial institutions can seize.
“Gen Z consumers often have to rely on free financial education and advisors because they don’t have any alternative,” Gregory Magana, Digital Banking Analyst at Javelin Strategy & Research told PaymentsJournal. “Older generations, which are more financially established, have an easier time getting in-person help. There could be a significant return on investment from offering Gen Z consumers Finance 101, so they can boost their financial confidence.”
