Gen Z Demands a Different Approach to Payments

Gen Z’s lack of access to credit and growing exposure to artificial intelligence require new purchasing tools and methods

San Francisco, CA, May 29, 2018 Gen  Z – consumers born after 1995 – have grown up in a smartphone world and financial services organizations need to modify their strategies and distribution approaches to effectively engage with this segment. A new Javelin Strategy & Research report, Technologies Influencing Generation Z Payments Adoption, examines how Generation Z’s interaction with technology is influencing and shaping their expectations and use of payments – and how financial providers can capitalize on them.

Gen Z transacts in a way not seen in previous generations. Their credit card ownership is depressed to historically low levels, yet their purchase rate via mobile over the past 30 days (64%) is much higher than the average consumer’s mobile purchase rate of 38%. Gen Z has also shown a willingness to use online credit services – 52% have used it in the past 30 days to make a purchase.

Gen Z’s use of non-traditional sources of credit is not surprising given the evolution of sites such as Facebook or Google with which they heavily engage. For Gen Z, shopping or sending money to a friend on a social media site has always been the norm, so going outside of the traditional financial ecosystem for their payment needs isn’t a foreign concept.  Usage of online payment services is only one symptom of Gen Z’s different payment expectations.

“Parts of the purchase cycle that were once done separately — product research, financing, and purchase — have started to converge,” said Michael Moeser, Director of Payments at Javelin Strategy & Research. “Financial providers need to recognize that the parts of this cycle they once owned are increasingly being completed elsewhere, often on social media or through a digital assistant, and they need to respond or risk being left behind.”

The report also reviews the key technologies Gen Z currently uses to engage not only with their banks and card issuers but with the world at large – and how these technologies are shaping this generation’s expectations around payments.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter
Recent Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *