Study: Young Consumers Ready for Mobile Payments (Sept. 19, 2013)
Younger consumers likely will lead the charge toward mobile payments ubiquity over the coming years, but they have certain expectations that must be met by providers who seek to harness that demand, according to a new report from payments processor Vantiv Inc.
The study, conducted in conjunction with Mercator Advisory Group, found that 78 percent of respondents ages 18-34 expect mobile payments to become common within the next five years, while 59 percent expect to be using mobile payments themselves. Already, more than three-quarters of the segment owns a smartphone, while one-third has a tablet. Meanwhile, younger consumers are more likely than the general population to view mobile payments as convenient, with 46 percent of those surveyed concurring, compared to 35 percent among all age groups. They also are more likely to prefer mobile payments to using a credit or debit card than the general population, at 26 percent to 15 percent, respectively.
Young consumers’ interest in mobile payments is bolstered by the sheer size of the market segment that comprises Generation Y and Millennials—those born in the two decades before 2000. The segment measures 85.4 million in the U.S., making it even larger than the Baby Boomers (81.5 million). Estimates of the segment’s direct spending power reach $200 billion a year—a number that is likely to grow as older Gen Y/Millennials reach their peak earning power.
The segment is uniquely attracted to an “omnichannel” shopping experience, centered around mobile devices and blurring the lines between in-store and online shopping. For instance, young consumers are more likely to use coupons received on their phones while shopping in-store, and to use “showrooming”—exploring products in brick-and-mortar stores and then buying items online. This omnichannel approach presents opportunities for payment providers and merchants, in the form of expanded consumer contact that is less restricted by time, location or channel, the report said.
