Youthful Generations Warming to Social Media Cost Apps: GoCardless

The younger you are, the better at using social media-based payment apps, a new study by GoCardless suggested this week. The payment infrastructure provider recently surveyed 1,000 American adults about their payment preferences.

They found that 56 percent of Millennials and 54 percent of Generation Z would be willing to completely switch from traditional banking to peer-to-peer and social media apps to make payments, compared to just 31 percent of Generation X and 14 percent of the boomers.

“The pandemic has changed the way we move money and pay for goods and services, with younger generations leading this new wave of alternative payments,” said Hiroki Takeuchi, Co-Founder and CEO of GoCardless.

Of the 39 percent of Americans who said they would leave traditional banking, 53 percent said they would switch to peer-to-peer and social media app payments because they are faster. Forty-nine percent said these payment apps were easier to use.

“Given the different preferences of Millennials and Generation Z, banks should pay close attention and find ways to integrate new things Online payment optionsthat offer the speed and simplicity that consumers are looking for, ”said Takeuchi. “If not, these cohorts can leave them entirely.”

Right now, 57 percent of Americans say they enjoy using social media-based payment services like Facebook Pay and Google Pay for purchases and transfers. However, this quota hides a generational gap. Almost eight in ten millennials (78 percent) and Gen Z (79 percent) use these services, while only 53 percent of Gen X and 21 percent of boomers do.

The pandemic has also increased adoption, as 51 percent are now more likely to use peer-to-peer apps like PayPal and Venmo than they did before the pandemic. Millennials (69 percent) and Gen Z (65 percent) are less willing with Gen X (44 percent) and Boomers (27 percent). Despite preferred intergenerational differences, America is becoming more and more digital. Today, 56 percent of 18 to 40 year olds already make a digital payment at least once a day.

Businesses need to customize their customer experience to meet Millennial and Gen Z expectations, or they could lose their business as 85 percent of Americans said they abandon a purchase if the online checkout process takes too long.

While most Americans are more comfortable with online payments than they were before the pandemic started, 35 percent are concerned about the lack of regulation, with 41 percent of Generation Z saying the lack of regulation is why they wouldn’t do it fully Switch to P2P and social media app payments. More than half, 53 percent, of the boomers think app-based payments aren’t as secure as traditional banking.

Still, the growth is clear: 35 percent of Americans opened an online-only bank account during the pandemic. Millennials lead the way at 51 percent, compared with just 7 percent of boomers.

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