Often known as “millennials”, the generation born between roughly 1980 and 1998 are now coming into their own. Millennials are completing their education, finding careers, and making money. As they take their place in the front ranks of U.S. consumers, it is important to recognize the effects that mobile payments are having (and not having) on this important demographic.
The rise of mobile banking.
Millennials have been one of the first groups to embrace the ease of using their smartphones for mobile banking. Many millennials never even visit a physical bank branch, opting instead to have paychecks direct deposited or to put them into their account via their mobile phone’s camera. More and more, these young, tech-savvy consumers are also using their mobile phones to send and receive money not only for goods and services but also among friends and acquaintances. As a result, cash is rapidly going the way of the dinosaur for this demographic.
When they want to pay for products and services, millennials have no qualms about taking advantage of their phone’s digital wallet. This built-in app enables a consumer to input their personal credit card data, store it securely, encrypt it, and have it available for payments. When the time comes to purchase a product, they simply make contactless payments by placing their phone close to a retailer’s near field communications (NFC) reader. Their data is verified via fingerprint or facial ID, transmitted into the merchant’s point of sale system, and sent for approval. Within seconds, the transaction is complete!
Enhancements in mobile technology.
For the majority of millennials who have chosen to make mobile payments a part of their lifestyle, searching for the products they want has also gotten easier. In just a matter of a few years, companies have optimized their websites to make loading images and searching for products on a mobile device a seamless process. An increasing number of retailers are even developing their own apps that can be downloaded and saved directly onto consumers’ phones, thus eliminating the need to open a browser or click through a series of tedious links.
What about the minority?
While many young people have been quick to make mobile payments a part of their daily lives, a minority is reluctant to join the trend. After all, they grew up during the recession of 2008 and witnessed the downfall of even the most venerable financial institutions. Shy of entrusting their data to technology, many of these millennials prefer to live “off the grid” as much as possible.
Only time will tell exactly what form payments will take over the next few decades. The millennial demographic spans a dizzying array of points of view, cultures, priorities, and degrees of acceptance of technology. For a large percentage of these younger consumers, mobile payments are destined to remain integral to their way of life; few would want to bank or shop without their mobile phone and this trend appears to be growing. Of course, cash will most likely never become truly extinct since there will always be those who prefer to avoid entrusting their data to others, particularly corporations.