Inflation drives spike in bill-splitting on direct payment apps: study

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New research shows that consumers are increasingly using direct payment apps like Venmo and Zelle to split restaurant and grocery bills with loved ones during the holidays due to rising prices.

A recent survey of 1,000 Americans by Forbes Advisor and OnePoll found that 47% reported splitting bills on apps such as Paypal, Zelle, Cash App and Venmo in ways they usually wouldn’t because of inflation.

“Because of inflation and a volatile economy, we feel that consumers are becoming more cognizant of their spending habits, trying to rein in excessive spending, and simply don’t want to bear the cost burden for someone else,” Mike Cetera, North America editor-in-chief of Forbes Advisor, told The Washington Times.

Young people who previously were casual or generous about paying more than their share of a bill are driving the trend, according to the survey.

The share of payment app check-splitters rises to 51% among millennials and Generation Z adults, with 58% saying they do it at least once a week and 29% daily, Forbes found.

And 30% of young adults reported the presence of “Venmo vultures” — close friends or family members who regularly send them small payment requests.

“As long as the payment requests are technically fair, as opposed to inaccurate, we suggest letting it be and not addressing it directly with people, which could cause embarrassment or conflict,” Mr. Cetera said. “If someone is stressed about money and it’s reflected in how they split expenses, try to be sympathetic to that stress.”

Peer-to-peer payment apps have grown in popularity in recent years. A Pew Research Center survey in September found that 57% of Americans reported having used PayPal at some time. Another 38% reported using Venmo, 36% Zelle and 26% Cash App.

Being frank and polite about using apps for bill-splitting keeps things from getting awkward with loved ones, etiquette expert Myka Meier wrote in a July 21 blog post for PayPal.

“People are afraid they’re going to sound cheap or ungenerous when talking about splitting the bill, but talking about money can be a normal thing,” Ms. Meier wrote.

The Forbes study found that groceries (45%) and restaurant bills (58%) are the top types of purchases people are splitting with family and friends with payment apps.

“Payment apps like Venmo and Zelle help make sure going out is evened out, and there is less worry about bringing the right amount of cash to a given event,” John Berlau, director of finance policy at the libertarian Competitive Enterprise Institute, said in an email. “Were it not for these apps, friendships might be lost from negative feelings one could harbor toward another who couldn’t pay his or her share of the bill at the time.”

The trend will likely keep growing among young Americans as long as inflation persists, said economist Daniel Lacalle, a professor of global economics at IE Business School in Spain.

“With the destruction of purchasing power of wages coming from inflation, citizens want to continue enjoying nights out but feel the need to control expenditure, and the rise of these apps is a clear consequence of the impact of inflation,” Mr. Lacalle said in an email.

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