It’s happened more slowly than most experts predicted, but consumers are beginning to embrace mobile payments more than ever before. Merchant payment systems like Apple Pay and Samsung Pay are becoming more popular, but surprisingly, not with the people that you might expect.
Research shows that millennials – the same demographic that prioritizes their smartphones above their toothbrushes – are among the slowest adopters of mobile payment technology. Weird, right? Despite the fact that millennials manage most of their financial life online, preferring to do most of their banking via their mobile devices, most millennials primarily use mobile payments to make peer to peer (P2P) payments. Even then, mobile is their third choice, coming in after cards and cash.
With more than 80 million Americans falling into the category of millennial, with average annual spending of $600 billion, it only makes sense to encourage these 20 and 30-somethings to use mobile payment technology. The question is, then, how?
Why Millennials Have Been Reluctant
Encouraging millennials to adopt mobile payments begins with understanding why they haven’t embraced them to begin with.
The biggest issue thus far has been the ease of use. Quite simply, most people find it just as easy to pay using cash or a card as it is to use their device. It’s comfortable, familiar, and they’ve been doing it for years. Many take the “if it’s not broken, don’t fix it” mentality toward mobile payments. This is only supported by the fact that many retailers still don’t even accept mobile payments. While many major retailers were among the first adopters of the technology, it’s not always a guaranteed option, especially at some of the smaller, local establishments that millennials like to frequent.
Security has also been a concern. In the age of major data breaches, people of all ages are concerned about the possibility of their data being exposed. According to research by Business Insider, a lack of trust for the technology is one of the top reasons for not using mobile payments. Despite assurances that the payments are just as – if not more secure – than card payments, many consumers are still leery of this option.
Finally, millennials have been slow to adopt mobile payments because they simply don’t see the benefit to the technology. In other words, mobile payment providers haven’t effectively revealed to consumers what’s in it for them, or given them a compelling reason to switch. Much of the marketing has focused on the convenience of the payments, but millennials have noted that they don’t find card or cash payments especially inconvenient.
The question, then, is how can mobile payment providers and merchants convince millennials to adopt and embrace the technology?
Meeting Millennials’ Needs
The questions about security have largely been addressed by mobile payment providers, and more merchants are accepting the payments as they discover that their customers expect it to be an option.
There is more that can be done to attract millennials to mobile payments. Among the tactics to consider:
- Integrate loyalty programs. millennials are looking for a reason to use mobile payments, and integrated loyalty programs are the ideal solution. Not only do they provide a compelling reason to use a mobile payment, but also increase convenience with automatic tracking and delivery of rewards.
- Ensure instant results. millennials aren’t patient. They have grown up in a world of instant gratification, and often note that the speed of mobile payments is a primary reason that they use them. To encourage millennials to use payments, data speed must be fast and give instant result.
- Get social. millennials are a social generation, and they want mobile payments that are integrated with their social lives. The success of payment provider Venmo, which combines social media with payments, points to the desire of millennials to integrate social into their payment options.
Increasing millennials’ adoption of mobile payments will be a key factor in the overall success of the technology going forward. By addressing their needs and desires, and better tailoring payments to what millennials expect, there’s no doubt that more people will use the technology on a regular basis. And maybe then, it’s possible that a smartphone will come close to being on par with a toothbrush in terms of importance.