Seven out of ten young adults no longer use physical bank cards to pay

Young adults (aged 18 to 25) are adopting digital alternatives to bank cards en masse. Among all age groups, they are using their smartphones and smartwatches the most, and the most frequently, with 69% of their point-of-sale payments in the past quarter done without a physical bank card. In the age group 26 to 35, this is true for nearly half (48%) of all transactions. What’s more, it would appear that future young adults will use their devices even more often: as soon as they’re able to pay by smartphone or smartwatch, 49% of 16-year-olds and 65% of 17-year-olds do so.

The future of bank cards

ABN AMRO commissioned PanelWizard to survey over 1,000 Dutch people between 18 and 65 years of age to find out to what extent they expect physical bank cards to still be used in five years’ time. The survey found that younger generations in particular expect payments to become increasingly digital and physical bank cards to gradually disappear going forward.

The rise of digital payment options has clearly sparked a change in payment behaviour, particularly among young adults. But change is also happening in other generations, who – even though they didn’t grow up in the digital era – are increasingly embracing new payment methods. Babet Boswinkel, Business Consultant and an expert on young people and money matters at ABN AMRO, observes that this means of payment brings with it challenges for young people: “More often than not, teens and people in their early 20s aren’t yet fully independent financially and are still learning how to handle money. The sheer speed of a smartphone or smartwatch payment sometimes makes them less aware of what they spend, whether or not they really need a product, and what its actual value is. It’s important that, as well as enjoying the convenience of digital payments, they learn to handle these responsibly and eventually reach full financial independence.”

* For this analysis, ABN AMRO has used fully anonymised, aggregated data on payments in the Netherlands in the second and third quarters of 2022 and 2023. The figures reflect active current account users who made at least one payment, logged onto their digital banking environment or withdrew cash from an ATM at least once in the second and third quarters of 2022 and 2023.