One of the things you have to think about as a business owner is whether or not you provide access to payment that your customers can use.
This means your payment platform needs to reach a wide variety of people and offer a variety of options. One of the most important demographics to reach, however, is the millennial segment of the population.
Millennials are becoming increasingly important to commerce. They are growing, getting jobs, and spending money. In fact, the millennial generation is bigger than the baby boomers.
The spending power that millennials bring to the table can’t be ignored, and your payment platform needs to reflect that.
How Do Millennials Pay for Purchases?
Millennial payment preferences are different to the preferences of generations before.
One of the biggest shifts is in the way that many millennials prefer to avoid using cash. It’s hard to carry around, and for millennials, who are digital natives, it often makes sense for them to have everything on their phones.
Indeed, a survey from CreditCards.com indicates that more than half of millennials use credit or debit when making purchases of less than $5.
Older consumers pull out the cash for small purchases made in person. Millennials, on the other hand, or likely to just keep pulling out the credit card or debit card. I know it’s common for me to swipe plastic, even when I’m getting a $3.50 chai tea latte from the local coffee shop.
If you plan to court millennial purchases, you need to offer credit and debit options. Even service providers and others that don’t have a set location can benefit from allowing people to pay with cards. Thanks to innovations in card readers that can be used with mobile devices, it’s possible for you to accept payment from cards.
The use of plastic is overtaking cash, and your payment platform needs to be ready for that.
Millennials and Digital Wallets
It’s not just about a payment platform that accepts plastic, though. Millennials are also more likely to use digital wallets. There’s a digital wallet revolution going on, thanks to the wider adoption of digital wallets.
Digital wallets are more convenient even than credit and debit card. It’s possible to store payment information in a digital wallet on a smartphone and then simply wave the phone in front of the payment terminal.
Business Insider reports that almost half of millennials have used a digital wallet to make a payment. I know I like using my own digital wallet when possible.
Not only that, but I like to use mobile payment platforms to make my life easier. I like to use my phone to purchase movie tickets ahead of time, and then just have my tickets scanned upon entry. I can’t even remember the last time I bought movie tickets at a counter.
Digital wallets allow us to store payment information, passes, and other items. Then, all we have to do is pull out the phone and have the QR code scanned. Since many people carry phones anyway, there’s no reason to have to carry around a wallet with cards and cash, too.
Are Millennials Using Cryptocurrencies?
When thinking about your payment platform, you can’t leave out cryptocurrencies.
Millennials are more likely than their older counterparts to use cryptocurrencies like Bitcoin.
When you are setting up your payment platform, or upgrading your payment platform, you need to make sure that you are including cryptocurrencies in the mix.
Digital currencies are important because they provide a number of benefits for business. You don’t have to worry about exchange rates and values set by the government. It’s easier to just exchange with your customer so that you can complete business without the worry of exchange rates and other issues.
Plus, fees are lower with cryptocurrencies. You are still charged a fee, but the fee is much smaller when compared with the transaction fees charged by credit and debit card issuers and payment processors. If you offer cryptocurrencies on your payment platform, you will appeal to a wider variety of people, including millennials.
While cryptocurrencies haven’t seen wide adoption and they aren’t quite mainstream, they could be headed that way. More people are using them, and millennials are showing a degree of enthusiasm. That means that there is a good chance that you will need to include some sort of blockchain option with your payment platform in the coming years.
Millennials Expect More Personalization in their Digital Wallets
For some in the older generation, it seems weird that millennials are willing to accept that their mobile carriers plan to mine data. However, millennials are more comfortable with the idea of companies using their data to provide a more personalized experience.
A growing number of millennials want to see digital wallets provide personalized service and help. According to a survey from CSG Systems International, Inc., about 35% of millennials want their mobile wallets to remember their payment preferences and apply payments to certain transactions.
That signals a growing interest in convenience. It also signals a certain level of comfort when it comes to personalization. Indeed, almost 60% of millennials in the survey indicated that would be willing to spend more money for personalized mobile services that customize their experiences.
When you provide a payment platform, whether it’s online or in person, you need to be aware of the fact that millennials like personalization and convenience. That means that you need to make sure your payment platform reflects that reality and provides a variety of options for them to choose from.
Online, it’s especially easy and convenient to provide a payment platform that works for more people. It’s possible to provide payment options that accept whatever form of payment your customers are most interested in using, from credit card, to mobile payments, to cryptocurrencies.
Another interesting tidbit from the CSG survey is the fact that many millennials are open to nontraditional mobile carriers. Close to a third of respondents indicated that they expect their service to come from providers like Amazon or Google in the future.
Millennials Ready to Integrate Different Parts of Their Lives
When you think about it, this acceptance of non-traditional mobile providers shows an interest in integrating different parts of life.
We’re already seeing the adoption of Amazon’s Alexa, and Google Home has been making a big push. If you can connect your home environment and your mobile device, you can have a more seamless experience.
Think about some of the things unveiled at the Consumer Electronics Show in January 2017. The ability to order groceries from your smart refrigerator? The ability to load a digital wallet to your digital watch?
All of this integration, from being able to use Alexa to use your voice to order from Amazon, to being able to order and pay for groceries to be delivered, shows an interest in using digital solutions to make life more convenient. Digital integration and personalization is a big deal.
You don’t want to get left behind in this digital revolution. Your payment platform is a major part of how you interact with customers — especially millennials.
The last thing you want is to get left behind. In fact, even as millennials are digital natives pushing the digital revolution forward, the generation after them is even more likely to continue the trend.
My son, part of Generation Z, can use his debit card at the vending machine at school. He almost never uses cash, and he’s a teenager. He streams games online and makes purchases using online payment platforms. To him, cash is a nuisance.
While cash is still out there, it’s disappearing. There will likely always be a need for cash. However, the reality is that as subsequent generations replace older generations, cash will become less important. As a business owner, it’s important to realize that and plan your payment platform accordingly.