4 min read
Millennials and Mobile Payments: The Way Forward
Each generation has an impact on society—baby boomers are associated with redefining traditional values, and Generation X ushered in an age of emerging technology. It is, however, the millennial generation, who came of age in a digital era that is credited with changing not only how we communicate but also with shaping the future of technology. There have been countless articles written forecasting millennial trends and predicting their expanding influence in both entrepreneurial and consumer markets. With approximately 80 million millennials—born between 1980 and 1999—in the United States alone, it is no coincidence that this group has been a clear focus of research and analysis.
Millennials are more connected to technology than any other previous generation. With the advent of smartphones, their world is literally at the tips of their fingers. Nearly 80 percent of millennials own smartphones, and on an average day “interact with their smartphone more than anything or anyone else". From staying in touch with friends and family, to reading the news or shopping, they rely heavily on their mobile phones to maintain contact with the world. With smartphones providing seamless access to mobile wallets and applications that eliminate the need to carry cash or credit cards, it is predicted that US in-store mobile payments will reach $503 billion by 2020.
Due to the sheer number of millennials, they make up a very large part of the spending population. With mobile being their main platform of choice, coupled with their need for instant gratification and reduced tolerance of poor online experiences, it is important for any growing business to appeal to the millennial market. Seldom will a millennial dole out cash for a purchase—in fact it is estimated that only four percent of the money moved around in the world involved physical cash as of 2016, and it will likely continue to decrease in 2017. With this need for digital money, payment service providers have incorporated cloud, image or proximity based payments and other technologies to offer customers the ability to accept payments utilizing a mobile device as a point of sale terminal.
Even though mobile payments are becoming more popular, they still face certain barriers. One significant factor that has contributed to this consumer hesitation in adoption is security. A survey by VocaLink, entitled “The Millennial Influence,” found that one in four millennials plan to abandon the use of mobile payments due to security concerns. This has pushed FinTech companies to research and integrate a variety of security solutions. Face recognition, retinal scanning and touch verification might have been the fodder of many sci-fi stories, but it is currently finding its way to reality. Fingerprint and “selfie” verification technologies for payment processing have already been rolled out, and biometric payments will likely expand globally and become mainstream in the foreseeable future despite adoption challenges.
The future just might be closer than you think. You soon might find an Amazon Go store in your neighborhood—where you can go in, shop and simply walk out with your groceries without standing in a checkout line. Payment technology is now geared towards providing more seamless customer experiences for a millennial generation that is seeking instant gratification. Peer-to-peer payment applications like Venmo and PayPal are some examples of how millennials are driving technological innovations that lead to a quick and seamless shopping experience. With all these changes, expectations for the speed of delivery and fulfillment of ecommerce products and services have also changed dramatically. With the Amazon app, you can shop, select and purchase within minutes and with the Prime Air drone delivery, even receive the product in as little as an hour.
Millennials are a budding influence in the mobile payments landscape, and in the coming years, will likely see a large influx of mobile adoption. The high mobile use among millennials will continue to drive a mobile component into everything we do…so much so that the phone may eventually become the new unique identifier and even possibly the new social security number or fingerprint. While there is a lot of research and information about the characteristics of millennials, it’s crucial to understand that not all millennials are alike and the most important focus should be on offering the products, services, experience, etc. that match individual preferences and provide personalization. In the future, we will see a continuation of the social and payments worlds colliding, and find new ways to leverage each other so that the next generation retail shopping experience is about checking in, not checking out.
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