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Table of Contents

Lead Story

Compliance: a costly, multi-headed monster

Patti Murphy


Industry Update

Cross promotions roll on VisaNet rails

Lucky7Coin bad luck for Cryptsy

New checks target mobile deposit fraud

Downstream networks detect Wendy's breach


Millennials and the payments game

Managing digital stakes


Your strongest, weakest LinkedIn

Dale S. Laszig
DSL Direct LLC

The outlook for payments: Five questions

Greg Cohen
iPayment Inc.


Street SmartsSM:
Know your customer acquisition costs

Jeffrey I. Shavitz
TrafficJamming LLC

EMV: Where we stand, where we're heading

John Buchanan

Understand and honor confidentiality

Adam Atlas
Attorney at Law

Targeting retail SMEs can kill your ISO's value

Adam Hark

Company Profile


New Products

Mobile CRM powers automotive, marine industries

Brandable, wearable, secure payment platform


Sales gardening 101


Readers Speak

Letter from the editors

ISOMetrics: Cybersecurity pressure cooker

Boost Your Biz

Resource Guide


Skyscraper Ad

The Green Sheet Online Edition

February 22, 2016  •  Issue 16:02:02

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Millennials and the payments game

As generations mature, rising into society's mainstream, the macro behaviors of each population are monitored to determine what kind of influences they will have on the world's socioeconomic landscape. The millennial generation (often defined as people who are now from 18 to 34 years old) is today's largest, most influential group of up-and-comers, and they are now under the microscope.

This dynamic population is already credited for turning the tide on a number of traditional practices, as well as driving the world toward several new trends. And, since the millennial generation is even larger than the baby boom group, a great deal of focus is on the purchasing power they wield, what they are doing to leverage it and how these behaviors are driving POS solutions in the marketplace.

According to a recent study conducted by Hitachi Consulting Corp. and the Bank Administration Institute, millennial consumers are the most willing adopters of alternative payment methods. Their usage of online and alternative purchasing methods is already at par with the preceding generation (typically referred to as Generation X and defined in the study as those aged 35 to 54). In addition, they have the highest debit card ownership (80 percent) of all generations and the lowest credit card ownership (56 percent).

Millennials are also embracing alternative in-store purchase methods. The same study found that 12 percent of millennials already own contactless payment devices, the highest proportion of any age group today. The Hitachi study confirmed that millennials use a higher level of person-to-person (P2P) payments, which is growing exponentially every year.

Yet another study on millennials released by Zogby Analytics indicates 83 percent of millennials believe mobile capture will be part of all mobile transactions in five years. This is a sign of the demographic's commitment to embracing alternative forms of commerce.

The power of a generation

So, what do all of these trends mean for the payments industry? Cleveland Brown, Chief Executive Officer and co-founder of payment provider Payscout Inc., as well Vice Chair of the Electronic Transactions Association's Payment Sales and Strategy Committee, stated, "I believe millennials have shaped and continue to shape the payments industry into what we call fintech. The explosion of disruptive technologies such as Uber, Netflix, Amazon Marketplace and others is in direct correlation to catering to the millennial demographic."

Brown also noted the expectation for these types of disruptive services places new demands on the payments industry. Payment providers are being called on to deliver added convenience and groundbreaking innovations without risking functionality and security. This level of expectation is a marked trait of millennials, and it is pushing the industry to provide new methods for seamless and ubiquitous engagement.

"Millennials care about social responsibility, working 'smart' and utilizing efficiency in all aspects of their lives, including payments," Brown stated. "This has forced the payments industry to transform rapidly and adopt new technologies and payment methods across the global payment ecosystem."

A new merchant also emerging

The millennial generation also has a high concentration of entrepreneurial interest. A 2014 survey of millennial career goals by Bentley University revealed only 13 percent of respondents were interested in climbing ladders at large, established firms. In contrast, 67 percent said their primary objective involved starting a business. A more recent study conducted by Babson College showed that 18 percent of millennial-age respondents were already running a new business or planning to start one.

These statistics are demonstrative of the changing business landscape that the payments industry must provide for. Millennial consumers are driving legacy merchants to innovate, and millennial entrepreneurs will be the merchants of the future who will, no doubt, hasten marketplace adoption of alternative payment acceptance.

This is a trend today's enterprising payment processors and merchant services providers should pay close attention to. It appears the industry's legacy ecosystem is being replaced by a network of alternative payment solutions that include the use of near field communication, P2P payments, mobile capture and cryptocurrencies. This suggests that card-based technologies may soon be a thing of the past.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | Harbortouch | USAePay | Humboldt Merchant Services | Impact Paysystems