Millennials and Gen Z: Shaping the future of payments
What exactly is a Millennial?
You may have a suggestion, but let us make sure we are all on the same page. As you might expect, the two generations (i.e. generation z and millennials) are defined solely by dates—in this case, years. Anyone born between 1980 and 1995 is considered a Millennial. There are around 80 million Millennials in the United States. The population of millennials is quite huge in the UK as well.
And who exactly is a member of Generation Z?
Anyone born between 1996 and the early-mid 2000s is considered a part of Gen Z. (end date can vary depending on source). Gen Z, sometimes known as “Gen Zers,” numbers around 90 million people in the United States. They represent a significant percentage of the population in the UK as well.
One common thing between the two generations of people is that they both like to be more digital and tech-driven than the earlier generations. This has bottled down even to their preferred mode of payment.
Unlike the older generation that preferred having a chat with the waiter or the waitress regarding a number of matters, including the current news as they pay, the younger generation prefers to stay away as far as possible using a payment method with the slightest contact.
Several modes of payment are pretty popular with the young generation.
What are the Current Payment Trends?
Since the Stone Age, economics, money, and the way we make payments have changed significantly. In some ways, all of them are vital signs of our evolutionary advancement as a species. Our basic manner of life was reflected in our rudimentary tactics. Similarly, today’s payment systems, which are based on cutting-edge technology, showcase our present technological advances.
Some of the common trends in 2022 include;
Authentication via biometrics
In the year 2022, biometric authentication has become increasingly popular. Biometric authentication is a means of verifying a person’s biological and anatomical traits. Fingerprint scanners, facial recognition, iris recognition, heartbeat analysis, and vein mapping are examples of these verification technologies. Even mobile phones these days have this technology.
From cards to codes
Initially, bank accounts were only identified by random combinations of unique digits on the card. However, EMV (Europay, Mastercard, Visa) technology has steadily gained traction, providing clients with a more computerised and secure payment process. This technology has been embraced worldwide, considering the convenience that comes with it.
Payments without contact
Another payment technique that will see rapid growth in the year 2022 is contactless payments. As the name implies, customers can make contactless payments by just waving their smartphones across the reader. Waving is a much faster and more convenient method than inserting a card. In the future, they will replace the use of cards altogether.
Mobile wallets’ dominance
In 2019, roughly 2.1 billion customers will use mobile wallets, according to RetailDive. This figure is expected to rise even further. A mobile wallet solution is a mobile application that attempts to emulate the functionality of a physical wallet. You can send money to other users, receive money from other users, and save money in your mobile wallet using a mobile wallet. Not only that, but a mobile wallet may be used to pay utility bills, purchase tickets, receive incentives, and much more.
AI and Machine Learning provide top-notch security
When it comes to payments, the most important factor is security. People will always choose a payment option with a high level of security. That is why payment technologies will not be able to progress without a high level of security.
Payments for smart speakers
Users of home assistants or smart speakers can issue voice commands to the device and receive a speech response. The user can use voice commands to acquire weather updates, traffic updates, Zomato orders, and Uber cab bookings, among other things.
The Benefits of these Modern Modes of Payments
Here are some of the most important advantages of electronic payments:
- Instant Payment
Electronic payments are substantially faster than traditional payment methods like cash and checks. You are not restricted by time or place when making online payments. You can effortlessly make payments from anywhere in the world at any time. Convenience at its core.
- More secure payments
One main concern when choosing a payment method is usually how secure the payment method is. This is a problem that has been addressed by most of these digital payment methods. This has helped reduce fraud cases. This is one of the main reasons why merchants have embraced modernised payment methods.
- Increased client comfort
Electronic payments can assist you in providing your consumers with a more convenient payment experience. It enables your customers to purchase things on credit by providing a pay later option. Instead of sending continual payment reminders to your consumers, you can have money collected automatically after a set period of time. How amazing is this!
- Reduces the cost of processing
You must first partner with a card processor if you wish to offer payment services to your clients. In exchange for providing you with a payment gateway for processing, the processor will charge you a set fee. This is an extremely expensive price.
- No contact
During the COVID-19 pandemic, people began looking for ways to minimise human contact in order to avoid becoming infected with the coronavirus. As a result, the demand for contactless payments has grown. The pandemic, to some extent, contributed to the widespread of some of these modern payment methods.
Gen Z and Millennials: The tech-savvy generations
According to Forbes, Gen Z will account for around 31% of the worldwide population in 2021. This population shift will be hugely significant. Because of this trend, the majority of the world’s population will be a tech-savvy or tech-exposed generation by 2021.
This generation will rely more on advanced, automated, faster, and more efficient technology and services. As a result, in the years to come, demand for digital payment methods will continue to skyrocket as many people, especially the two generations, embrace the digitised payment systems.