Millennials more open to mobile payments

February 29, 2016

For some time now, experts in the mobile payments market have been saying that widespread adoption was just around the corner.

For some time now, experts in the mobile payments market have been saying that widespread adoption was just around the corner. While that obviously hasn’t come to pass quite yet, the fact of the matter is that it will likely do so soon. The drivers of that massive coming wave of adoption will, perhaps unsurprisingly, be those in the youngest group of smartphone owners: Millennials.

Data now suggests that while only 3 percent of transactions come as a result of consumers using their smartphones to make purchases, 7 percent of those completed by people aged 18 to 24 move through those channels, according to a new survey from GfK. That is, of course, more than double the national average, and indicates a significant trend among young people to be more interested in mobile transactions in general.

Young adults know mobile payments are secure and convenient.Young adults know mobile payments are secure and convenient.

More data
In addition, more than half of these youngest adults polled said that they’ve made a mobile payment for an online purchase in the last six months, well above older millennials (those 25 to 34, coming in at 37 percent) as well as nearly double those in Generation X (27 percent), and four times that of baby boomers (14 percent).

Further, nearly 1 in 3 young millennials recognized that these transactions are far more secure than traditional ones, the report said. That was close to double the level seen among all respondents, and likewise was five times greater than the awareness among baby boomers.

“Many consumers today do not understand the value proposition offered by mobile payments,” said Tim Spenny, Vice President of GfK’s financial services team. “This creates an opportunity for the industry to develop its own narrative around why people should use mobile devices to pay for their purchases – with security, speed, and ease of use top among the reasons. In 2016, we see mobile payments gaining traction through the addition of benefits such as rewards, discounts, and coupons that are integrated into phone payment systems.”

Areas of deficiency
However, the youngest group of consumers were not as optimistic about their security situation when making these purchases as their slightly older counterparts, the report said. While 33 percent of those younger millennials said they thought mobile payments were 100 percent secure, the same view was shared by 36 percent of older millennials. Meanwhile, only 10 percent of baby boomers and 24 percent of Gen-Xers felt the same way.

And interestingly, the younger groups also seemed to be slightly more aware of some potential risks, the report said. In all, 55 percent of young millennials and 60 percent of older millennials were concerned about the security of their personal data, compared with 54 percent of Gen-Xers, and 51 percent of boomers.

This trend indicates that consumers are at least becoming more savvy about mobile payments even if they’re not using them en masse. That could, in turn, be a positive push for retailers who have yet to adopt these platforms, because the security and convenience they provide will go a long way.

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