If you haven’t heard (or read) the word millennial at some point during the past year, you might have been living under a rock.
Born between the early 80s and mid-90s, millennials witnessed the genesis of technology as we know it. As they grew up, Amazon, Google, and social media were born. Videotapes and cassettes were replaced by DVDs and CDs, to be replaced again by online streaming.
Unlike Millennials, their successors Generation Z – born between 1995 and 2015 – are reaching maturity in a world already dense with AI, smart devices, apps… all the technological wonderment of the modern age. For them, it’s the norm.
What does this mean for your business’ payment methods?
The upshot is this: Whether they grew up alongside it or were born into its arms, both millennials and Generation Z are fluent in technology. They’re keen on the convenience afforded by tech and, in particular, by modern payment methods.
And why should you pay attention to this? Well, Millennials spend an estimated $600bn per year in the US alone, meaning they have more spending power than any other generation. Additionally, Generation Z is expected to become the largest consumer group in the US by 2020: already, it directly spends up to $143bn each year.
Millennials are the big spenders of the present, and Gen Z’ers are those of the future. In fact, these two groups hold such powerful influence that their payment behaviors are said to drive how the US’ payments ecosystem is developing.
Tailoring your products, services, and marketing to these groups is one thing. But, no matter what you sell, it’d be silly not to consider their preferences when deciding how your business will accept money.
In doing so, you’ll be future-proofing this more technical side of your operations – at the same time as gaining a competitive edge by becoming an easy and enjoyable place for today’s super consumers to exercise their colossal spending power.
How to future-proof your payment systems
In this day and age, inconvenient is a label you do not want. Here are three simple steps for developing a payment system that fits with the growing expectations of modern money spenders…
#1 Accept contactless payments
When it comes to convenience, contactless is king. Simply whip out a card, tap, and pay – forget the thumbing of pin numbers or signing of receipts. And it’s thanks to this ease and speed that contactless has become a key driver for economic growth.
Now, we know that contactless encourages spending. In 2016, Visa reported that the UK’s cashless economy had experienced major growth following the contactless limit jumped from £20 to £30 (or $26 to $39) in September 2015 – with restaurants, gas stations and supermarkets reaping the most benefits.
Keen to delve deeper into this connection, we at Expert Market researched international contactless caps to reveal how much consumers can spend, sans-PIN, in different countries.
We found China and Japan to be well ahead of the curve. In China, you can drop up to $145 in a single contactless payment, while in Japan you can splurge up to $176 – and it’s likely no coincidence that these two countries are rapidly-developing economic powerhouses.
By contrast, the US’ $25 dollar limit seems paltry. But, given the millennial and Gen Z desire for a smooth experience, contactless is set to catch on in a big way here. In fact, according to a 2018 report from Paysafe, US and Canadian contactless adoption is set to rise by 74% in two years – with 60% of merchants accepting it by the end of that period.
Our advice is to place your business at the forefront of this growth by installing a POS system or card machine that accepts contactless payments and encouraging your shoppers to make use of it.
#2 Accept mobile wallet payments
Led by apps like Apple Pay, Visa Checkout, Android Pay and PayPal, the mobile wallet revolution enables users to store credit card details and spend money using their smartphones – including the ability to make speedy payments by simply tapping them to readers.
It’s a payment trend that’s only growing. According to Bluefin, worldwide mobile wallet spending rose by a stunning 114% – with mobile transactions increasing by 38% – in the fourth quarter of 2018 alone.
And who are the pioneers of this proliferation? Why, tech-savvy millennials and Gen Z’ers, of course. While Millennials were the ones that brought the system to life (in 2016, 72% of mobile wallet users were millennials, according to The Pew Charitable Trust), Gen Z’s mobile wallet usage is now outpacing that of an older generation.
This is no big surprise. After all, these generations are used to the convenience of doing everything on their smartphones: watching TV, ordering clothes, checking their bank balance, applying for jobs – the list goes on. So why not use them to tap their way through the purchases of the day too?
And it’s not just smartphones – for even more convenience, wearable devices are joining the mobile wallet family. Apple Watch fans, for example, can now sync Apple Pay up to their watches and drop payments with the flash of a wrist.
Paysafe’s 2018 report predicts that mobile wallet acceptance among US and Canadian merchants will grow from 29% to 62% in the next two years. We believe you should become a part of this by utilizing POS systems or card machines that can accept mobile payments – after all, this is a key trend that you don’t want to fall behind on.
#3 Choose portable POS
Known to be fans of efficiency and instant gratification, millennials and Gen Z’ers don’t like waiting in lines (well, who does?). So, if you can help your young customers avoid getting in line, you’ll be onto a winner.
One intuitive way to banish long lines is with portable small business card machines. These enable you to go to your customers and take payments from them, wherever they are in your establishment.
You can see portable card machines in action in restaurants, of course, when a waiter or waitress comes to your table so you can pay your cheque. However, these devices can also work well in stores, bars, cafes, salons… anywhere in which lines and crowds might be rife.
Consider Apple, a deity on the list of Gen Z’s favored brands. Apple Stores use a portable POS system which enables staff to freely roam the floor with card machines, processing payments wherever they find a keen customer.
There are two card machine choices to go for here: Either a wireless card machine or a mobile card machine. The former usually works by connecting to wifi, or they can be hooked up to a traditional landline. The latter connects to a mobile network, either via a built-in SIM card or by linking up to an app on your smartphone.
With portable card machines affording speed, efficiency and an atmosphere of forward-thinking tech-savvy to businesses, we think it’s well worth exploring them to get your millennial and Gen Z customers onside.
So there you have it: Three tips for future-proofing your business’ payment systems and ensuring millennials and Gen Z’ers – whose habits are starting to direct how US businesses must accept money – can easily exercise their enormous spending power with you.
What do you think about contactless, mobile wallets and portable POS? How do you keep your millennial and/or Generation Z customers happy? Join the conversation by commenting below!
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