The coveted "Millennial" generation of consumers ages 18 to 34 is central to the success of any new payments technology – but this group also has a wide range of financial goals that make it hard to target with a one-size-fits-all product.

"Millennials are a hot issue now and everyone wants to jump on the bandwagon to provide services for them, but they are not all the same," says Bobbie Martin, senior consultant at TNS and head of the company's consumer payment strategies program. "They have very different lifestyles."

New York-based TNS Financial surveyed 7,150 Millennial consumers during August and September for its recently published 2013 payment research.

Payments providers need to view Millennials in three segments — college-aged, young and developing, and young matures — to differentiate their wants and needs, the report states. It will also be essential for providers to target niche Millennials, those defined as "high rollers" with household incomes of $100,000 or more, because they do a significant amount of purchasing, banking or investing online.

Financial and payments providers may have to forgo some short-term gains to establish long-term relationships with Millennials and capture their loyalty at a time when consumers in that age group have far more purchasing clout, the report says.

More than any other generation, Millennials have access to "an enormous array of online payment tools and smartphone payment apps," the report indicates. Nearly 60% of Millennials consider themselves "early adopters" of technology, which is far more than other generations. Only 43% of Gen X'ers say they are early adopters, while only 35% of Baby Boomers categorize themselves that way.

However, plastic cards aren't doomed in the Millennial world, Martin says.

"The report reaffirms what we have been telling our clients, that more Millennials are jumping back into credit cards this year," Martin says. "This comes after a drop off from the 2008 financial turmoil."

As Millennials reach the "young matures" ages of 30 to 34 they ease credit cards into their arsenal of payments. Of the various payment methods available, 36% of Millennials rate credit cards as their most preferred option, compared to 28% for debit and 17% for cash. More than one-third of Millennials use mobile devices to make purchases or payments online, the report says.

Still, credit card charge volume and outstanding balances are substantially lower today among Millennials when compared to five years ago, before the recession set in, the report says.

College-aged consumers find debit cards fit nicely into their lifestyles for convenience and budgeting, and online spending as a percentage of total debit card spending is greater among Millennials than other generations.

The Millennial generation is also the most diverse of all generations, with a large subset of Hispanic consumers.

Hispanic consumers show a strong affinity to debit cards, and they are highly tech-savvy and tend to "show more resolute financial responsibility" than other consumers, the report says.

Alternative and mobile payments from payments PayPal, Amazon, Google, Starbucks and Square are gaining more exposure, and digital wallets are picking up momentum at banks and through third-party providers. Millennials are aware of all of these technologies, the report states, which means providers will need to integrate mobile and other emerging payments into an omni-channel strategy.

It will be tough for financial services providers to remain relevant in the eyes of the Millennial generation, the report says. Millennials want low-cost banking, but have high expectations. They are always connected electronically and expect the same from their providers, the report says.

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