Businesses have been preoccupied with how to cater to and exploit to their advantage the peculiar characteristics associated with consumers born between the early 1980s and early 2000s. A new report released by professional consulting firm Accenture indicates that the so-called Gen Z – the generation immediately following millennials – is the payment industry’s future customer base.
Gen Zs are projected to make up 40 per cent of all North American consumers by 2020, according to Accenture’s report Driving the future of payments – 10 mega trends. Accenture conducted an online survey of 1,000 adults in the United States and 500 in Canada between September 1, 2017, and September 10, 2017. The overall margin of error is +/- 1.55 percentage points at the midpoint of the 95 percent confidence level.
“While these future consumers share some traits with their older siblings, Gen Z is very different from their parents and grandparents,” according to the report. “Gen Z is naturally digital. They have never lived without Google, Apple, Facebook, and Amazon. They are mobile mavens.”
Here are some of the key findings of the survey:
- Moore than half of the millennials and Gen Z are comfortable sharing online bank account credentials to a third-party for more value (rewards/discounts).
- 68 per cent of Gen Z consumers are interested in person-to-person payments more than any cohort
- While Gen Z use mobile banking the most, 23 per cent of Gen Z consumers still visit bank branches – more than any other age cohort
- 70 per cent of Millennials and Gen Z consumers are attracted to AI-enable tools to manage finances
- With $15 billion redeemed in cashback/miles/points, a large sign-up bonus or value of purchase is the biggest reason to switch their primary rewards card
- 23 per cent of consumers would give up their mobile banking app for a digital wallet so all their payment information is in one place
- Eighty per cent of Gen Z consumers would give up television for a day—and an astonishing 28 per cent would give up friends or money—to keep their mobile phone
“This ‘see now, buy no’” generation craves immediacy,” the report said. “Devotees of Snapchat and Instagram, their average attention span is just a few seconds.”
User experience is one key to winning over the Gen Z consumer, according to Accenture.
GenZers move fast but still demand personalized and highly-relevant experiences as consumers. As the payments market expands, customer experience will become a prime differentiator. The danger for many traditional non-digital players is that they are losing control of customers due to their difficulties of getting a handle on customer experience. For instance, businesses need to tie-in other desirable services to the payment solutions they offer customers.
The survey showed that 70 per cent of millennials and Gen Z consumers are interested in digital payments advisory and expense management services that can give them a better understanding and control of their personal spending.
“This is a clear signal that payments have moved beyond the transaction. Next-level customer experiences matter more than ever,” the report said.
Businesses can look to Google as an example of how to do it right. The search engine has made a fortune in becoming the prime destination of choice for finding information.
By owning search, Google collects billions in advertising revenue.
“Even if people have no interest in the ads, the times that they actually do is pure gold. The same is true in payments. Providers that are present across the payments journey in the moments that matter to consumers—not just if or when a transaction occurs—are golden,” the report said.
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