How Millennials Are Reshaping The Digital Payments Landscape
It’s no secret that millennials are digital natives. For the tech-savvy generation, paying for a cappuccino using a pay-and-go method or buying a sweatshirt with one click at a button has become the norm.
Millennials are stirring up the change in global e-commerce. Backing away from cash, they drive innovation in the digital payments industry. That’s the reason digital-driven payments become one of the trends apparently ripe for millennials. So, how are they disrupting the world of payments?
Due to an increasing reliance on always-at-hand payment methods, banking industry is at the highest risk of disruption. Millennials gain varying preferences on how they want to pay for their day-to-day needs. For e-commerce retailers, the trick lies in allowing the customers to pay where, when, and how they actually want.
With the explosive growth of mobile phones, the digital payments landscape is inevitably changing. Looking ahead to the future, we should prompt some important questions:
- What sets millennials apart from other generations?
- What buying habits do millennials have?
- How can we adapt to the needs of the millennial generation?
Thus, we set out to understand how millennials are using various payment methods and why they are doing so.
Millennials: what sets them apart?
It’s no news that 98% of Millennials – young adults between 18 and 34 years of age – have a smartphone, and 97% of them are active on social media. Social media and mobile devices have become an integral part of their daily lives.
Millennials don’t want to dig their wallets out. They are absolutely comfortable
about paying via smartphones.
Millennials and their money
According to annual Digital Payments research, millennials are driving all types of e-commerce behaviors, including shopping, money transfers, and daily paying activities. 69% of UK millennials manage their money and check balance using their phones or tablets.
Digital payments have never been outstripping face-to-face spending so successfully.
But this time, they are on top of the game.
How millennials like to pay
Millennials place mobile banking back at the heart of their spending behavior. They are spearheading digital payments in all shapes and forms, from on-the-go mobile shopping to contactless payments via Android / Apple Pay.
65 percent of millennials have now paid for certain products or services via mobiles, compared to 42 percent of the general population. 18-34-year-olds also lead the way in making face-to-face payments their regular habit. Only 29 percent of the general population have used this innovative payment type, compared to a half of millennials.
Thus, millennials enjoy the game-changing payment trends.
And this tendency is unlikely to be left behind.
How millennials like to be paid
Much to the surprise of everyone, 58 percent of Millennials still prefer cash over cards, at least when it comes to getting paid. Exchanging cash is secure, convenient, and easy. Besides, it’s accepted literally everywhere. Opting for cash, millennials save themselves from spontaneous spending and paying transaction fees.
Even though millennials like to be paid in cash, 84 percent of them use credit or debit cards to do their shopping. These guys know a thing or two about benefits associated with digital payments. They are selective, tech-savvy, and detail oriented. They want to pay for food directly from their cars as they drive home, and there’s nothing we can do but adapt.
What’s in store for digital payments future?
Long before the digital era, payment innovation was all about striking the right balance between security and flexibility. This is exactly what forced people away from cash, along with the introduction of debit/credit cards, chip, and PIN.
Since the credit card uptake, payment experience has expanded. But no millennial will rely on convenience with no security underpinning it. Mobile device manufacturers understood it properly. They developed a technology that ties convenience and security together.
Facial recognition has been embraced as the most trustworthy payment method. Fingerprint scanning does not trail far behind it, however – 76% of millennials find it secure as well.
With the emergence of tokenization, new payment trends make a shift in millennial thinking.
The challenge is to keep up with them.
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Digital payments: an opportunity or a threat?
As you could already understand, millennials are special. They convert to digital payments, looking for advanced technical solutions and easy accessibility.
Staying ahead of millennial demand matters really a lot. So, let’s discover some guidelines recommended by Visa in their recent report.
1. Digital-ethos mindset
Millennials are self-reliant. They won’t appreciate pitchy ads or annoying popups. They want to find solutions quickly and independently. Give your business a digital presence and offer Millennials access to individual accounts.
Convert your website into a communication platform. Let users exchange knowledge and ideas, bringing you extra traffic and income. Communication with them is all about your ability to build trust and bring value. Make sure your customers are properly catered for.
2. An omnichannel approach
Understand your clients’ preferred channels and invest in them. Align customer relationship management across different products. Millennials should experience a smooth and seamless journey across various touch points. Your task is to provide real-time support and direct communication.
3. Be disciplined, relevant, open to communication
This means developing specific messaging for all groups of your customers. Once you become authentic and open to communication, you get lifetime customers.
It’s essential to consider different needs for intergenerational communication. Be clear and concise in what you offer. Develop a differentiated approach for varying customer groups.
Digital payments are leading the way
Over the next few years, we should see the digital payments industry become Millennial-friendly. It may result in quicker payments, simpler management, and enhanced client relationships.
All in all, millennials are disrupting digital payments, and businesses have no choice but to evolve with them. So is it good or bad? Share your opinion!