​Looking at new shopping data and research, we found that millennials are rapidly changing their online behavior compared to their credit predecessors. Millennials are now the fastest growing segment of PayPal Credit shoppers rising to 33 percent of total PayPal Credit shoppers in 2015 up from 28 percent in 2013. Rather than shunning credit altogether, this influential group is turning to alternative credit services to help manage their finances. We enlisted Koski Research to conduct a survey to further examine why millennials are engaging with credit differently and here's what we found:
  • It's all about technology, reputation and clarity. Millennials love technology and are willing to use new credit offerings from 'cool' innovators that they know and trust rather than traditional players with whom they have no relationship. They are nearly twice as likely as their parents to prefer using products from innovative tech companies: 50 percent of millennials vs 29 percent of boomers [2]. More than one third of millennials (more than 23 million millennials) consider credit cards to be 'old school,' and they are more likely to be annoyed by the processes of using traditional credit cards online than their parents' generation (29 percent of millennials vs 21 percent of boomers) [3]. They've also learned hard lessons by watching their parents navigate the Great Recession, which makes them more open to using flexible and transparent online technology to manage their finances.
  • Security matters. Our study also showed that the majority of consumers surveyed are concerned about their security when using a credit card nearly 75 percent [4]. However, the growing number of millennial PayPal Credit shoppers reflects that 'breach fatigue' may also be contributing to the change in online credit behavior. In the wake of unprecedented breaches, nearly 70 percent of millennials are more likely to trust companies that are technology based [5].
  • Retailers should take notice. These are the types of shoppers that retailers pine after - millennials spend more money online in a given year than any other age group, represent a quarter of the population more now than baby boomers; and specifically, we found that PayPal Credit millennial shoppers are those with higher income spending power. Our survey shows that millennials are most likely to use online credit to pay for clothing and accessories (45 percent), electronics (33 percent), and travel (27 percent) through the end of this year [6]. As retailers prepare for the holiday shopping season, they should take note of how these coveted credit users want to pay for their purchases and evolve their payment options to embrace this influential group of shoppers.

At PayPal, we've evolved the credit experience with a transparent and affordable solution that provides shoppers with clear, flexible terms. We also offer shoppers more options including no Payments and no interest if paid in full in six months on purchases greater than $99, and Easy Payments which offers the ability to divide larger purchases into fixed, predictable monthly amounts. It's clear millennial shoppers want simple, flexible and innovative credit options.
[1] Bankrate August 2014 Financial Security Index
[2] PayPal Millennial Credit Survey, September 2015
[3] PayPal Millennial Credit Survey, September 2015
[4] PayPal Millennial Credit Survey, September 2015
[5] PayPal Millennial Credit Survey, September 2015
[6] PayPal Millennial Credit Survey, September 2015

Amanda Christine Miller, Head of Global Communications - Credit, PayPal

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