The payments industry, much like any other, is shaped around what customers need and their expectations. Unsurprisingly, there have been numerous studies centred around customers’ preferences and how these differ based on particular factors. We have previously discussed the most popular payment methods globally so, in this article, we will dive into customers’ preferences, how they have changed and how they are expected to change in the future.
Gen X (those born between the mid-60s to early 80’s) are the biggest users of mobile payments and digital wallets, just above millennials. However, mobile payments are becoming increasingly popular across all generations. It is estimated that by 2023, approximately 1.3 billion people will use mobile payments in some way (Statista reports). Generally, younger generations are more tech-savvy and therefore more likely to prefer digital payment methods or adopt the newest payment trends.
Millennials are also thought to be particularly keen on rewards programmes. In fact, 68% of Millennials would consider changing where they shop based on the rewards opportunities they got offered (Bond Brand Loyalty study). If younger generations are your client base, introducing rewards and loyalty programmes may be a good option for your business. Imburse enables you to deploy any payment method you want for both collection and pay-out, including rewards vouchers and gift cards.
On the other hand, older generations (66 and older) prefer to use physical debit or credit cards, with American Express being one of their top favourite issuers. Naturally, older generations are more resistant to technology advancements and tend to choose payment methods that have been around the longest and feel the most familiar.
Research suggests that women prefer to use debit cards, whilst men prefer credit cards. Men tend to use credit cards for rewards or cashback, whereas women use credit cards on one-off, higher-value purchases rather than regular ones. Women are also more likely to own prepaid cards, such as gift cards, and to pay via alternative payment methods such as PayPal.
When is comes to customer behaviour, women tend to be more digital-focused, but they also pay more attention to security risks when shopping online. Overall and despite the differences mentioned above, gender actually does not have a high impact on how customers shop or their preferred payment methods. Age, for instance, brings much larger discrepancies.
Customers on a lower income have a significant smaller usage of any payment method, including debit and credit cards, alternative payments, digital wallets, and even paper checks. They prefer to use cash as their main payment method. The higher the income, the more customers prefer alternative payment methods and online payments. Equally, those on a higher income use credit cards more. Income has a strong correlation with education, so the statistics are similar for both parameters: Whilst higher educated consumers tend to prefer credit cards, lower educated consumers tend to prefer debit cards (Bank of Boston research).
Knowing your customers is the first step for you to meet and exceed their expectations. If your customer base is Gen X- dominated, for instance, you could be offering credit cards to meet their preferences. Similarly, if your customer base is composed mainly of Millennials and Gen Z, it may be worth offering NFC payments, alternative payment methods such as PayPal or digital wallets. The safest bet is to offer as much variety as possible, so that it is likely you’ll offer your customers exactly what they want regardless of their age, gender, where they are based or their financial situation.
Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.
In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.
Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.