The COVID-19 pandemic might finally be what pushes mobile pay more fully into the forefront of consumers’ minds. That is one of the findings in “Generation Pay: Report 2020” from financial services technology company FIS, which assesses various generations’ comfort levels and desires for mobile payment options.
Dan Brames, head of North America and International Merchant at FIS, spoke with NRF about the key findings, including what the report says about acceptance of new payment methods.
Big picture: What were some of the key surprises that “Generation Pay” revealed?
It was revealing that most of these trends were consistent globally, given how rare it is to see this alignment across geographies on the same topic. Large proportions of each generation are interested in new payment technologies and, to some degree, are using mobile payments on a regular basis.
The fact that older generations are adapting their spending habits to digital technology at a high rate is promising. “Beyond boomers” (74+ years old) rely almost exclusively on credit cards to pay across the board, and which card they prefer is heavily influenced by the associated rewards. They are also the most likely generation to shop with retailers that offer loyalty programs over those that don’t. This shows an interest in older generations to stay up to date with the latest payment methods.
How are purchases made via social on the rise and what can retailers do to capitalize on this?
With the increase in spending on social ads across industries, this rise in social buying adoption is inevitable. Hyper-targeted outreach tools are available to almost every merchant, with millions of data points available to ensure the consumer is seeing something they would probably buy.
Merchants that want to capture customers through social media need to ensure they have a strong digital ad profile and can target consumers with items they would be interested in seeing.
Check out more ways retailers are incorporating technology into their sales here.
There seem to be a lot of intentional shopping efforts focused on local and independent businesses. What does the research reveal about how smaller businesses can capitalize on this trend?
Small businesses should be focused on enhancing their digital capabilities, creating loyalty and rewards programs, and finding a way to stand out among the crowded field. With the COVID-19 crisis, local and small businesses have taken a huge hit in bricks-and-mortar traffic, so there is a need to pivot to online and digital very quickly.
Having a unique digital profile with a strong brand is the best way to do that, especially when competing with ecommerce giants that have sophisticated and robust digital engagement programs and have not seen the same challenges amid the pandemic.
“More than one-quarter of each generation is actively purchasing through social media.”Dan Brames
Bringing those two trends — social shopping and local focus — together, how can small businesses compete with major retailers in the social shopping space?
More than one-quarter of each generation is actively purchasing through social media, so there is a market in this space. Small businesses need to prioritize brand messaging and create a strong sales pitch to compete with the large retailers. Investing in the technology that allows you to compete on that scale is also vital and that’s the key takeaway from the Generation Pay report.
Your research revealed a pretty sizable movement to mobile payments during the pandemic. What do retailers need to know about this shift?
Merchants should know that adoption for mobile payments will be consistent across all generations if there is sufficient education on how to use those tools at checkout. Where there is a huge opportunity is in the area of loyalty and how that integrates in a mobile function; 69 percent of Gen Xers’ payment preferences are influenced by the associated rewards. Retailers should heed this trend and ensure they are engaging and retaining customers at the point of sale.