Millennials' Financial Habits Are Worth Noting as Payments Evolve
Western Union has released its Bill Payments Money Mindset Index, a survey of the financial habits of this country's largest age demographic: Millennials. Or, as they're also known, Generation Y, a group born between roughly the early 1980s and early 2000s.
While the winners of the burgeoning mobile payments market are far from being decided, the survey—which Western Union commissioned from Javelin Strategy & Research—is an effort to help Western Union's customers understand the importance of integrating mobile and online capabilities into their bill-payment options and to prepare for a market expected to have a transaction value of more than $721 billion in 2017, according to research firm Gartner.
Among the survey's most tellingly Gen Y findings were that 21 percent of "Gen Y-ers" have never written a physical check to pay a bill, and that 39 use percent use three or more methods (snail mail, mobile, PC) to pay their bills.
Gen Y also beat out all other bill payers when it came to paying bills with cash, credit or debit cards. (Debit was the most popular of the three, which Gen Y uses 41 percent of the time, compared to all others' 28 percent.)
Gen Y also beat out all other mobile users in the degree to which they use apps and mobile tools to make bill payments (38 percent, versus 22 percent); view statements (38 percent, versus 24 percent), view bills and transaction histories (43 percent, versus 25 percent) and set up automated recurring payments (24 percent, versus 15 percent).
They're also, if not savers, anticipators of savings. Sixty-one percent said they plan to open a savings account or have plans to save, and 71 percent said they're planning to cut unnecessary spending in the next six months.
How to cater to Gen Y? Western Union advises businesses to provide a choice of payment methods that emphasize convenience; that these channels include features like email reminders and text alerts to ensure payments are made on time; and offer e-billing, as the environment is a priority to Gen Y.
The Changing Payments Market
According to a recent Ovum Consumer Insights Survey, the mobile payments market is still very much in flux. The firm expects service innovations, notably around location-based features, to increase in 2014, as well as for the market to consolidate to a degree.
"There has been an explosion in digital wallet launches over the last two years and this is not sustainable going forward," Eden Zoller principal analyst with Ovum's Consume Practice, said in a Jan. 15 statement. "Consumers will not adopt multiple digital wallets and instead will focus their loyalty and spending with one or possibly two services."
The survey found that 43 percent of respondents named their bank as their most trusted mobile payment provider, followed by credit card companies (13 percent), online payment providers (9 percent) and mobile operators (6 percent).
Ovum also expects Near-Field Communication (NFC) technology to find little traction in 2014 and 2015, mobile beacon payment services and apps to find strong adoption, location-based apps to be a major focus this year and tablet-based mobile commerce to sharply increase in 2014 and beyond.