A Generation Changing Payment
Gen Z, those born between 1997 and 2012, are changing how money moves around the world. They grew up in a world with instant access to smartphones and social media. They have learned to expect speeding, versatile and digital convenience in all their transactions. This is clearly evident in the new payments of Gen Z, a new crossroad of convenience and innovation.
Unlike previous generations who transitioned from cash to card to mobile payments, Gen Z bypassed most of this process. Gen Z has matured to become adults surrounded by mobile wallets, online banking and social apps to make payments and transfers, such as Venmo, Cash App, and Zelle. For Gen Z payments that are digital isn’t newer or an upgrade, it is simply as a default.
The concept and idea of the new payment methods of Gen Z is so much more than technology. It is a way of life, it is control, personalization, and security. They do not want just to pay quickly they want to pay with confidence using preferred payments systems that integrates with their lifestyle, values, and spending habits.
How Generation Z is Changing the Way We Pay
This generation’s money management style is influenced primarily by three forces: digital fluency, financial awareness, and social influence. They are comfortable with multiple sources to manage their money, track subscriptions, split bills, and transfer money. They are also wary of standard credit card debt and prefer payment solutions with options for flexibility and no long-term consequences.
Gen Z’s payment choices are based on a few main preferences that businesses and payment processors need to be aware of.
1. Digital Wallets and Contactless Payment
For Gen Z, Apple Pay, Google Pay, Zelle, and PayPal are second nature. This generation uses mobile wallets and makes contactless payments on a regular basis. According to PYMNTS, 85% of Generation Z prefers contactless digital payments. The appeal is simple, fast, secure, and available anywhere.
Making a tap payment or performing a financial scan is as easy for Gen Z as sending a text message. Gen Z expects retailers, restaurants, and even service providers to offer this type of payment option and describes businesses that do not as “outdated.”
2. Flexibility in Payment Options
One of the more popular methods of both new payment methods of Gen Z is using is the Buy Now, Pay Later option. Payment acquirer services such as Klarna, Afterpay, and Affirm are quickly becoming a preferred payment method after using credit card options.
Instead of a recurring line of credit, Gen Z would rather rely on shorter-term, interest-free payments that they can incorporate into their planning, giving them flexibility to budget better and to feel more in control, both of which are important values for this generation. Often, companies providing the Buy Now, Pay Later option see higher conversions with younger consumers, since it reduces indecision at checkout due to financial hesitance.
3. Social and Peer-to-Peer Payments
Money walks with good company! Apps such as Venmo, Zelle, and Cash App, allow Gen Z to instantly transfer money to one another, whether they are going in on paying for a dinner tab, paying rent, or purchasing a concert ticket. These apps are designed to facilitate providing or receiving money and combines the actions of making transactions with a social component. In some cases, the transactions with these apps can serve as self-expression with the use of emojis or comments.
Gen Z’s new payment solutions are not just about functionality; as previously discussed it was evident that along with needing quick, secure, low costs and even non-cost ways to pay, Gen Z needs to feel a sense of connectivity in their paying experiences. They want their payment to feel personal, instantaneous, and transparent.
4. Integrating Payment to Create Fluid Experiences
Gen Z creates their digital life around connectivity. Whether they are shopping through a social post, paying for their fitness class in an app, or checking out of an online experience without leaving, they expect payment to occur quickly and seamlessly.
Embedded payment, where the payment transaction occurs in-app and browser, bypasses needless pain points and makes it faster and smoother to check out of an experience.
When a business meets Gen Z’s engagement in the environments where they spend their time, it creates a competitive advantage. A frictionless, one-click checkout can be the difference between a completed transaction and an abandoned cart.
The Importance of Security and Trust
Even though the Gen Z population is open to innovation, security is still king. They are very aware of breaches of data and breaches of privacy. For all generations above Gen Z, trust in a brand takes years to build, but Gen Z requires proof that the security is visible. The group leans toward digital wallets and apps that equip encryption, tokenization or two-factor verification.
For companies, this leads to the necessity of creating transparency. Unknown or hidden costs, vague terms, or unknown refund policies can have the group moving elsewhere in seconds. The best way to capture the loyalty of Gen Z, while using new payment methods, is employing a trustworthy communicating style, transparency, and immediate verification.
The Experience Matters
The checkout experience itself is also part of the area in which Gen Z has the experience. An awkward checkout experience; a long, uninspired form; or any other form of inconvenience can ruin the overall experience with a brand. Gen Z grew up in a world blending media and frictionless interfaces, such as, streaming apps, social media platforms, immediate download. That being said, they expect the same in payment.
Brands that pay attention to a speedy and enjoyable payment experience will see a lift. While a payment method can be safe and accepted around the globe, it does not seem as impressive as storing a card in an app, using a digital wallet, or seeing reward points change on the fly, things have to feel easy. Convenience is no longer just nice, it is expected.
Innovation and Future Spend
Today, mobile wallets and Buy Now, Pay Later are leading the way as methods of payment for Gen Z, and already there are signs of new innovation bubbling up. Gen Z consumers are already playing with crypto currency, digital assets and payments using wearables with their smart watches. They love the technology if it gives them perceived control, the ability to download a digital asset or pay with something in seconds. They love technology that offers liberty, personalization, and speed. As long as they feel safe doing it.
As Gen Z earns more and more financial independence, they will have an even greater impact with their engagement. Businesses that think ahead and adapt will form valuable relationships as Gen Z becomes the consuming class of influence in the next decade.
Why Partner With Gulf Management Systems
As the payment industry is continuously evolving, Gulf Management systems is at the forefront of modern payment systems. Let GMS provide you with a way to take advantage of the new payment systems Gen Z expects, through flawless technology, fair pricing, and premier security.
GMS lets you accept the new payment methods of Gen Z is using today. Digital wallet, contactless payment, ACH and recurred billing options, made easy. The adaptability of the platform allows you to be quicker and safer while allowing the customer to have the experience they want in the modern world.
GMS also promotes trust and reliability. GMS is PCI compliant, offers transparent reporting, and provides customer service, with every single transaction. If your goal is to somewhat unreasonable Gen Z customers, GMS will make introducing new payment methods of Gen Z easy and exciting.
As the definition of money is constantly evolving, new payment methods of Gen Z will be the new frontier for commerce. GMS is prepared to help transition your business for this evolution, safe, connected, and built for the generation that demands change in every transaction.
The post New Payment Methods of Gen Z appeared first on .
