Demographics across the world are shifting. Millennials are now the most diverse and prominent generation in the US population.
As a generation heavily influenced by technology, their buying habits and expectations are all formed via the immediacy that smartphones, Internet, and modern conveniences engender.
Businesses and consumers alike are interested in faster, safer, and more convenient payment methods, as cash is becoming obsolete and credit cards are being phased out. Mobile and social payment options could be the future of millennial-driven purchasing, creating the sort of instant gratification that millennials expect.
Here are a few trending digital payment methods that Millennials will prefer to use in the coming year.
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1. Mobile in-store payments and apps
The development and usage of mobile POS options will increase exponentially as the demand and usage of mobile devices grows. A few facts about mobile device usage:
- Nearly 90 percent of millennials today own and are in close contact with their smartphones throughout the day.
- Consumers are currently making over $4 billion worth of purchases from their mobile phones. Researchers predict that the numbers will reach $34 billion in just a few years.
- In a recent study, 56 percent of consumers said they would use their mobile devices as a payment method if it was an easy option.
Currently, options such as SMS and NFC payment methods are possible, but they are not prevalent or convenient enough to satisfy the growing demand of millennials for an easier, faster, and safer way to pay via mobile. Opening up smartphones as a POS method of payment will create innumerable opportunities for the entire payments industry; turning a mobile device into a smartphone credit card reader would effectively enable anyone with a smartphone to complete transactions whenever they wanted.
In-store payment apps are also on the rise, with PayPal Beacon and Apple’s iBeacon paving the way. Many consumers are turning towards these methods as a safer option, quicker than waiting in line, and easier to access, as each transaction has its own unique code. They allow users to simply pay for items found in the physical store via apps on their mobile phones.
2. Digital currencies
Digital currencies will surface and solidify their place in the economic ecosystem of financing.
With the entire world shifting towards more technologically-driven payment methods, digital currencies, such as Bitcoins, could be the future of financing and may change the entire economic structure of the world. Even if they don’t completely take over, digital currencies will become more popular among the millennials who enjoy innovation, freedom, and convenience - all commodities that virtual money offers.
The popularity of digital currencies stems from the instantaneous and border-less nature of the transactions. Essentially, this payment method can be used anywhere, and it isn’t being regulated by government influences and rules, yet.
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3. Ewallets and mobile payment applications
What You Should Know About Amazon's New Data Centers in South KoreaThese apps allow users to transfer money, purchase products, pay bills and complete virtually any other type of financial transaction, all with the tap of a finger. By creating an account and storing your payment details in it, purchasing goods and services with the mobile device is quick and easy – both virtues that millennials appreciate. Again, mSwipe is an excellent example of this convenient technology being put to use, along with Venmo, Google Wallet, and Apple Pay.
OnlyCoin is running on a slightly different mobile technology in which all of the user’s financial information is stored on a device the same size and dimensions as a credit card that is connected to a mobile app. It allows users to pay with any of his/her payment methods, including credit cards, with only the need to carry one card.
4. Social media payment options
Social media networks will expand their reach to include payment solutions such as transferring money from one user to the next (peer-to-peer) or paying directly within the network.
An overwhelming number of millennials will turn to social media when looking to purchase. Five out of six millennials who were surveyed said they connect to companies through a social media network, and 95 percent of these consumers take their friends’ recommendations as the most reliable accreditation. What this tells the smart marketer is that their consumers are networking, and companies had better get social fast.
Social payments are being split into two categories: on-site purchases and peer-to-peer money transfer services. SnapChat released SnapCash, a quick money transfer channel that lets users exchange cash from one account holder to another instantly. This would be different than mobile payment apps, like those listed above because the money would be transferred directly from one bank account to the other rather than being stored in a separate wallet or app account. Pinterest, on the other hand, is utilizing “Action buttons” within their platform to allow users to add items to their Amazon Wish List or to complete a purchase directly from within the Pinterest site. [Related Article: Can I Press Play Or Must I Pay? Music Licensing Requirements for Businesses]
Changes in the world of payments have been propelled forward by the millennial generation. In 2016, we will see the continued rise of various alternative payment methods, such as those above, while the use of cash and credit cards, among this generation, in particular, will continue to decrease. Is your business ready?