'Generation Plastic' Spending Analyzed

Visa U.S.A. Inc. said purchases by young people have boosted its volume for low-cost purchases.
The San Francisco card association said last week that its first-half volume of transactions of less than $25 rose 17% from the same period last year, to $27.3 billion.

A key factor was consumers aged 18 to 25, a group Visa calls Generation Plastic or Generation P. According to Visa, 60% of those consumers prefer to use their card for transactions of less than $25, and they are 20% more likely than their parents to use payment cards for small purchases.

Visa said it surveyed 1,154 cardholders from all age groups and found that 86% said they used cards for convenience, 62% because they are easy to use, 45% to manage expenses, and 35% because of other benefits offered.

According to Visa, members of Generation P use debit cards for 44% of their everyday small purchases, compared with 33% of cardholders over 45. The younger respondents said that they are more likely to use debit cards than other payment types, and that they often rely on debit cards linked to a bank account to track their purchases.

"Generation P doesn't remember when ATMs and debit cards didn't exist," Niki Manby, a Visa senior vice president of product innovation, said in a press release.