How Generation Z Pays During Checkout

The desire for alternative payment systems is particularly strong in younger consumers. For over two decades, making an online payment was a candid choice: card or digital wallet?
But while these two payment systems remain available to this day, the landscape has shifted considerably. From in-app payments to mobile wallets, prepaid vouchers, and even online cash, the increase of smartphones and digital technologies has created more and more ways to pay, providing users with convenience, flexibility, and choice.
More importantly, customers are now securely in the driver’s seat. They no longer have to pay using one of the methods merchants offer. Instead, they expect to use their favored payment method. And they’ll move on to another merchant if this isn’t available.

The revolution is generational.
According to our latest research, where more traditional customers remain more prepared to pay with their card and using a digital wallet as a backup, younger customers are welcoming a wider range of ways to pay.
This holds particularly true for Gen Z i.e. consumers aged 24 or under. Our research found that less than half of Gen Z consumers — 39% — regularly pay online with a credit card compared to 49% of other consumers.
By contrast:
40% habitually use in-app payments
34% habitually pay with a mobile wallet
29% regularly pay with online cash
25% habitually use prepaid vouchers or pins
But the trend isn’t just limited to Gen Z.
Millennials — consumers aged 25 to 39 — use alternative payment methods just as often at Gen Z. The only notable differences are that Millennials have a slightly higher inclination for online cash payments (30%) and a lower liking towards prepaid vouchers and pins (23%).
In comparison, the popularity of alternative payment methods is much lower for customers over the age of 40. Only 24% of Gen X (consumers aged 40 to 54) habitually use in-app payments, for instance. And even fewer Baby Boomers (consumers aged 55 to 74) use them — 16%.

Why consumers under 40 are choosing alternative payment methods
Younger customers are adopting alternatives, while older consumers are sticking with more conventional online payment methods.
There’s no denying that more youthful consumers — and especially Gen Z — are more aware of alternative payments. Case in point, our research found that 83% of Gen Z consumers have heard of mobile wallets, while 84% have heard of in-app payments. But while more comprehensive awareness surely plays a part in driving adoption — consumers can’t use a payment method if they’ve never heard of it — it’s only one piece of the puzzle. Indeed, the argument that more Gen Z consumers use alternative payment methods because they’re more aware of their existence doesn’t always hold water. Consider this. While only 57% of Gen Xers and 49% of Baby Boomers have heard of prepaid vouchers and pins, for instance, awareness of mobile wallets is high across the board. 83% of Gen Xers — just 1% less than Gen Zers — have heard of them. And 79% of Baby Boomers have also heard of them. Yet, only 24% of Gen Xers and 15% of Baby Boomers regularly pay with a mobile wallet. So what other factors might be affecting payment choices?

Old habits
While there can’t be appropriation without knowledge, different generations also have differing attitudes to finance and technology. And this unquestionably influences their choice of payment methods.
Case in point, where 60% of Gen Xers use a smartphone daily, they also use credit cards more profoundly than any other generation. This could be because they came of age at a time when it was easier to get a credit card. But it’s probably also due to their attitude towards online security — according to a LastPass study, 79% of Gen Xers worry that they’ll be hacked.
By contrast, even though Baby Boomers have been slower to adopt new technologies, those that have done so are as enthusiastic about it as younger generations. The problem is that they’re comfortable with credit cards and digital wallets, so they don’t see why they should use alternatives. A Pew Research Centre study, for example, found that 43% of Baby Boomers don’t use mobile payments solely because they prefer to pay using other methods.
In comparison — and because they’re digital natives — Millennials and Gen Z are more content with tech and, so, more open to trying new technologies. At the same time, the younger customers of today have a harder time getting access to credit cards, and this may also be pushing them further towards alternative payment methods.

The future of online payments
Whatever the motives why younger customers prefer alternative payment methods, it’s clear that offering just card and digital wallet payments at the online checkout is no longer going to cut it. By 2020, 40% of consumers will belong to Gen Z. And this means merchants who don’t start offering more choices at the checkout risk losing a sizeable chunk of business. At the same time, our research shows that more and more consumers of all ages are waking up to the benefits of alternative payments. Moving forward, the advice for merchants couldn’t be more clear if you want to attract and engage more customers, offering more payment choices.

For more information on how we can help you offer more payment options visit our Partner Page https://btrpay.com/agent-iso-partner-program/

What’s Next For The Payments Industry?

2019 was an impressive year for the payments industry; tech innovation and the changing perspectives and expectations of customers and businesses continue to reshape the aspect of both physical and digital commerce. Due to the recent pandemic, we expect the evolution of payment services to continue; some of the key trends that emerged last year will become even more prominent. We predict the following will play a significant part in determining the future of payments in 2020.

NFC /Contactless Payment

Coming into 2019, the US market was years behind many nations in the world in the adoption of contactless (NFC enabled) debit and credit cards. There is a collective effort on the part of consumers and banks to correct this due to COVID-19; Visa is predicting that over 100 million NFC enabled cards will be in circulation in the US by the end of 2020.
In addition to the release of contactless cards, one needle-mover may be the growth of the Visa Ready for Transit program. In the UK, it was the introduction of contactless payments to the London Underground that sparked a notable increase in adoption; and over three million contactless payments have been made since the contactless payments pilot was started on many subway services in New York in June 2019. The number of routes will increase in New York as well as launching in San Francisco and Boston in 2020. Merchants are ready for the change, and the consumers are demanding it. Contactless payment is here to stay as we are fully aware of how COVID-19 spreads.

The constant rise of omnichannel payments

As small businesses try to keep up with their online competitors, they are coming under an increased requirement to deliver the same user experience customers receive online and at the checkout, this means offering the same breadth of payment options, and user experience.
This is one reason that we will continue to see more omnichannel payment initiatives launching in the coming months. Another reason is that consumer purchasing habits are changing, preferring a more blended experience of online and offline interactions. Keeping cards on file, the growth of mobile payments, and improvement in mPOS technology payments are continuing to merge.

Consumers demand invisible payments.

Offline, consumers are frequently comfortable with the concept of invisible payments. Apps such as Uber, where a consumer receives an experience and can walk away without having to worry about payment, receipts, tips, and change, have redefined best-practice for seamless payments. Similarly to Apple Pay, Google Pay, Amazon Go continues to grab the notice of shoppers; 16 stores are now open in the US, and Amazon has said that there will be a massive scale expansion in 2020. And several start-ups are replicating the Amazon model.
As these types of payments become more commonplace in 2020, consumers will increasingly demand this exciting new way to pay. Expect the number of real-world retailers and assistance providers looking to imitate this model to increase substantially in the next 12 months.

Moving beyond two-factor authentication

The deadline for implementing Strong Customer Authentication (SCA) has been pushed to December 2020, but that has not prevented biometric authentication for payments from growing in importance. In Lost in Transaction: The end of risk? 48% of consumers told us that they had authenticated a payment using fingerprint, facial recognition, or voice-activated technology. Among consumers aged 18-24, adoption rates are significantly higher (69%). But this isn’t the end of the online payment authentication course. As users continue to demand more security and, at the same time, frequently frictionless checkouts, technologies that leverage other more passive authentication factors such a location, time of transaction, and even predicted behavior will come to the fore. And there will be even more exciting developments in the next year on top of these, but surely, this gives you a taste of what we’re expecting to see take the payments world by storm in the next 12 months.

For more information on NFC/Contactless secure devices that are ready for the future, contact us at 877-423-8637

The True Impact Of 5G On eCommerce

For those who have followed the evolution of 5G, it has become sufficiently clear that the sky is the limit for this technology. The potential utilization should leave anyone staggering for the sheer gravity and breadth of it all. Nowhere is this more clear than in the world of eCommerce; when you take a closer look, it is clear that the full range of 5G applications has the potential to transform the experience of online shopping completely.

5G is king

There’s a reason that 5G has been named “fiber without the fiber.” It has been shown to produce similar speeds to fiber optics – reaching even into the gigabit range – and since it’s a wireless transmission protocol, it requires no extensive infrastructure of buried or hung cable. Its infrastructure demands, by example, are much more straightforward – often including a tower, transmitter, and some incidental hardware – and can, therefore, be made available in more places.

This directly addresses a point that has been a hot topic issue of contention almost since the inception of the internet itself: the “digital divide.” There are many places in the United States, and beyond, where internet service of any sort is either unavailable completely or prohibitively high-priced and limited in scope. This keeps those folks out of many typical applications that those on the other side of the divide take for granted.
With 5G in extensive use, suddenly, users have access to ultra-high-speed internet of adequate capacity to open up a range of new facilities. Imagine what happens when those who beforehand had no access to even cable television can suddenly stream Netflix. Imagine what this means for bottom lines as market sizes suddenly increase by double-digit factors.

Everything new

For anyone who’s ever used 3G wireless or dial-up internet, we know that its ability to conduct high bandwidth processes such as streaming video was limited at best. We furthermore know that when we have access to improved systems, like 4G or megabit cable, the performance of these technologies continues to improve. Now, what happens when we go to the latest technology, but try to run it on the backbone of current models? We get the same effect that we did to stream video over dial-up.

Thus, with 5G, we’re able to open up a whole new range of technologies like augmented and virtual reality. We can put these technologies to work in eCommerce operations, and we’ve already seen them at least get started. We’ve seen how augmented reality can take a smartphone’s camera’s view of a living room, and show us just what a specific sofa might look like in-place if it was purchased. We’ve seen some stores experimenting with mirror surfaces that can show just what a shirt might look like on a person, enabling us to ‘try on’ considerably more clothes in a much shorter period. These points are just the beginning of the new technologies that we can put to use with the right infrastructure.

But will everything old, or new, still work?

5G can revolutionize eCommerce, whether by showing us how things look in their proper setting or taking the trouble out of driving a car, not every possibility will come to fulfillment. Several vital concerns emerge over the impact of such changes. For instance, introducing technology to new markets, and crossing the digital divide could have a significant effect on the region. What happens to the formerly-vibrant local hardware store when anything it has—and then some—can be had, cheaper, on Amazon or eBay?

The issue of the smart city has never emerged without privacy concerns; intelligent cities depend on a flow of information on a scale never before seen. 5G will almost certainly not deploy evenly, but rather be implemented in the standard fashion, addressing large municipalities first and then filtering down into the countryside, which in some cases is still waiting for 4G to make an impression.
There is an excellent potential for 5G to impact eCommerce, but it doesn’t come without potential drawbacks or a lack of uniformity. Still, with a massive array of possibilities for new markets and new technologies alike, 5G is worth every bit of resources required to put it in place and keep up with its developments accordingly.

Learn How Integrated Checkouts Are The Future For Software

Paysafe a Betterpay payment partner recently spoke to 200 independent software vendors (ISVs) based in the United States and the UK developing solutions across a range of business verticals, here are some essential takeaways from the report.

Market requirements are getting more complicated.
Software developers are urgent to differentiate themselves from the competition because the markets they are operating within are more aggressive than ever. 34% of software providers believe that they are working in an overcrowded market, and a further 54% of ISVs describe their market as very aggressive. Only 12% consider that the market they function in is underserved by suppliers.
Pressure on prices (identified by 41% of ISVs) and the influx of new competitors in the market (determined by 39%) are two of the most significant challenges ISVs expect to face in the next year.
Software developers also have essential concerns when it comes to scaling their businesses. The cost of scaling is the issue that worries the most significant percentage of ISVs (45%), followed by regional competition (40%) and a lack of expertise on their teams (40%).

Developers are turning to payments to improve their software
In the context of these broader business challenges, the ability to offer best-in-class combined payments as a feature of a software solution appears key to futureproofing and growing; 88% of businesses confirmed that improving their payment integrations was a priority.
Despite only 28% of ISVs considering it to be industry-standard to offer integrated payments in their solution, 100% said that offering integrated payments was an important aspect of their product offering. Of those, 70% said that it was very important or critical that they were able to offer integrated payments as an ingredient of their solution.

Merchants demanding more integrated payment methods
Developers are adamant that allowing more payment methods within their integrated checkout is one of the most important issues they need to overcome in the next 12 months. On average, ISVs currently offer four payment methods in their integrated checkout but have hopes to expand this to nine within a year.
And 80% stated that the range of payment options an integrated payments provider could offer was a critical consideration when selecting a partner. 35% described this as necessary, more than any other differentiating factor.

Real shortage of internal resources are keeping them back

For 71% of developers, internal issues are a significant hurdle when integrating payments; 46% say that they don’t have adequate internal resources, 35% say it takes too long to incorporate the product, and 13% say they have no access to a development center or community.
When asked about how important this factor is when selecting between payment providers, 77% of software developers said that the effort required to integrate the solution on their part would be a crucial differentiator, and 28% confirmed that this is an essential consideration. 6% identified this factor as the single most important consideration for them.

Specific vertical knowledge is becoming essential.

In addition to not offering all the options that they are looking for (42%), developers are frustrated that they are not being offered integrated payment solutions that are specialized to their specific needs. Over a third (35%) say that suppliers’ inflexibility and inability to provide anything other than a one-size-fits-all solution is a challenge that they have experienced. When searching for a payment partner, 23% state that they have had difficulty finding payment providers that understand their sector. When asked directly about the determining criteria for selecting an integrated payments partner, 68% of ISVs identify specialization in their sector as a very important factor; 23% say this is critical.

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