The Innovation Group at J. Walter Thompson Intelligence released a
report, “The Future of Money” Report reveals that millennials
in US and China are becoming a powerful economic force who want more financial
products to be more integrated with their lifestyle, and are driving the
growing use of mobile payments and person-to-person payment services offered by
fintech companies such as PayPal, Venmo, Apple, Samsung, Google, and others. They
say 63% of US millennials and two-thirds of Chinese millennials hardly ever use
cash. Fintech startups are catering to specific needs and lifestyles
of millennials that banks often overlook. Millenials are budget conscious and
are now using apps to help them budget and save up to meet their goals.
According to First Data, 40% of people in their twenties have downloaded a
money management app.
“The
financial sector is going through a period of unprecedented change, presenting
massive opportunities and also
challenges to traditional institutions, said Lucie Greene,
worldwide director of the Innovation Group. “Consumers are adopting new
behaviors en masse, including peer-to-peer payments, digital-first banks,
cryptocurrencies, and more.”
Millenials are driving much of the mobile payments use, but in the US,
mobile payments are not as popular as they are in China with their use of
WeChat and Alipay. In fact, according to Mercator Advisory Group’s
CustomerMonitor Survey Series report on mobile payments: Mobile Payments: Greater Value
Is Needed for Widespread Adoption, mobile payments is not catching
on as fast in the U.S., though 50% of US smartphone owners have used mobile
payments in the previous year, more use it online (49%) than in stores (32%,
down from 39% in 2016), but fewer did so in stores than in 2016. In fact, more
than two in three consumers say that incentives, rewards, and discounts would
motivate them to use mobile payments more often. And, those who use it often,
10 or more times a month are the only mobile payment user who uses mobile
payments apps more often than in previous years. In an upcoming study on
personal finance, young adults are indeed more budget conscious since 9 in 10
adults aged 18 to 34 adhere to a monthly budget. Today, young adults are more
likely than older adults to use financial advisors and 80% or more young adults
would like their financial institution to provide more services to help them
build wealth such as automated savings, support for household budgeting and
tracking to meet financial goals. And, young adults are interested in more
personalized services and attention when interacting with their financial
institution. Fintechs appear to be doing a good job of integrating their apps
with the social lifestyle of millennials. And, in fact, 3 in 5 U.S. adults and
4 in 5 millennials use person-to-person payments, primarily PayPal and Venmo
followed by Google Wallet, Facebook Messenger, and FI-based programs.
Click
here for the original article form Payments Journal.