Does your generation define the way you like to pay?
Have you ever thought about how your customers prefer to pay? Well, it turns out there are some differences in payment preferences, depending on the ages of your customers.
As we move towards an ever-increasing digital age, consumers are demanding more convenience and flexibility in the way they pay for goods and services.
There are a number of trends in the payments space that are influencing customers’ preferred payment methods.
We dig into the latest payment trends, how they cross over into the different age groups and how you can use these insights to improve the customer experience in your business. As a business owner, here’s what you should know.
Gen Y & Z
Trend: Adopting digital payment technologies
New digital payment methods are emerging all the time, with a strong focus on customisation and flexibility to enhance the customer experience.
Smartphone usage is much higher in younger generations, with high levels of comfort using and trusting online technology compared to older generations. Gen Y & Z are twice as likely than Gen X to pay with a smartphone. And they are six times more likely than baby boomers! This age group is the most likely to adopt new and innovative payments technologies.
Trend: Cash use declining
Cash has been trending down for the past 13 years, with a dramatic drop seen during 2020. Contributing to this decline are Gen X payers. A NAB report found that out Gen X, they were among the least likely age groups to prefer to pay for goods and services with cash.
The same report found that the most common reasons for people to carry cash on them was for smaller transactions under $20 and for emergency use. Gen X were found to only have on average $65 dollars in cash on them compared to $92 for baby boomers. They were also less likely to want to use cash for larger purchases or ongoing transactions.
Trend: Increasing security standards
Baby boomers have seen significant changes in payment methods over their lifetime. While they may have seen a lot of fads come and go with technology, one primary driver remains the same.
The number one concern for baby boomers when it comes to making payments is security, which explains their reluctance to move away from cash as their preferred form of payment. Baby boomers were the most likely demographic to pay for goods and services in cash, closely followed by debit cards for larger transactions.
What do all of these trends mean for your business?
You probably already have a good idea of the demographics that make up your customer base, which will help you work out which payment methods your business should be offering. If you’re looking to acquire new customers, work out what age groups you want to target to get a good idea of which payment methods to offer them to entice them to your business.
Gen Y & X
If your customers largely fall into this age bracket you need to be offering them the ability to pay for goods and services any time, anywhere. The digital economy runs 24/7 which means businesses need to be offering payment solutions that can be accessed round the clock. Real time payments through Ezidebit can be made over the phone, in person or online, giving your Gen Y & Z customers flexibility when it comes to making payments.
If your business is only offering cash payments for large or recurring payments, you might want to consider offering Direct Debit arrangements for your customers. Not only can direct debit services automate the payment process for your customers, reducing the need for them to manually get cash out, it will also reduce your admin time processing payments.
The best way to reassure your older customers that it’s safe to do business with you is to let them know your business has safe and secure payment methods. In Australia and New Zealand all businesses that take card payments need to comply with a set of security standards, designed to protect their customers’ payment data from credit card fraud.
Partnering with a payment provider that offers the highest level security with all of their transactions will go a long way to reassuring your older customers that you take their security seriously.
Now you’ve got a good understanding of your customers’ age groups and the trends influencing their payment preferences, you can make informed decisions on the types of payment methods that will suit your customers.
And if you’ve got customers of all ages, it’s important to offer variety and flexibility when it comes to offering payment methods.
Want to know more about how digital payment adoption can help your business? Talk to one of our payments experts today to find out how.