27 January 2017
Millennials are the driving force behind mobile payments
The number of cashless payments increased by 52 percent between 2011 and 2015, with a total of 471 billion cashless payments worldwide in 2015. While the use of cash is decreasing, there is a momentum for mobile payments. According to Dutch bank ING almost half of the European mobile device owners bank by mobile, which means there is fertile soil to expand the market share of these mobile payments. Why are millennials are incredibly important in this process?
Millennials are leading
As research by advisory group Grey Owl shows, millennials (people between 18 and 34 years old) are key in the growth of mobile payments. Nearly all of the millennials (91 percent) are using their phone to shop online. Even when they are in a store, they check their mobile phone to check prices. More than half of this group bought something online in the month before the survey.
Comparing the results of both surveys, there seems to be a gap between the total group of mobile payment adapters in the ING report and the millennials of the Grey Owl research. The explanation is simple. Millennials are usually the people who pick up a new development first. And now the mobile payment adoption by millennials has reached a peak, which means that the technology is known by a huge number of people. These people are the best ‘sales persons’ that a bank can wish for because they can explain their friends and family how mobile payments work. Millennials grew up in a digital world and are used to share information and that is why they are the best party to explain new developments to other people.
This can be compared to the adoption rate of Facebook: first the millennials picked up the social network. When Facebook became a part of the daily millennial ritual, other people wanted to know more about this novelty. And look where we are now: we can find everybody on Facebook, from our children to our grandparents. Millennials advocate new technologies and that is why their needs are very important for developers to take into account when new services are launched.
Meet the needs
A way to do that is having a good look at the Grey Owl survey. Developers can create something new to meet the needs of the millennials based on the report. When they look at the in-store behavior of millennials for instance. Millennials use their phone to compare prices and they look up reviews of the product that is in front of them. They can stimulate mobile payments by creating an app with a scanner, which makes it possible for clients to scan a product with their phone and get a complete overview of prices and reviews. When you add an option to purchase the items in the store by phone, the customer experience improves.
This idea is consistent with other findings from the survey, like ‘millennials are interested in new forms of mobile convenience’ and ‘millennials pay by mobile phone regularly’. With the fading supremacy of cash payments, mobile services should step up now. With the millennials leading almost every development, the focus of developers should not be fragmented. Focus on the millennials: the rest will follow.
- Industry insights