The Millennials Influence
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RESEARCH 2016 THE MILLENNIAL INFLUENCE HOW MILLENNIALS OF THE USA WILL SHAPE TOMORROW’S PAYMENTS LANDSCAPE USA INTRODUCTION CONTENTS INTRODUCTION 3 This research into US millennials’ Millennials are coming of age – the I hope you find these insights and payments behavior is part of our long- oldest of them are hitting the peak of themes both interesting and useful WHAT ARE WE TALKING ABOUT? 4 standing commitment to play a leading their economic productivity and their and encourage you to continue the role in the discussion about the future of greatest purchasing power. Their choices, debate through our online hub OUR AIMS AND APPROACH 5 payments systems. their behaviors and their concerns are Vocalink CONNECT. MILLENNIALS AND THEIR TECH 6 set to profoundly shape developments Having been at the forefront of across every spectrum of business and SOCIAL MILLENNIALS 8 developments in our industry for 60 commerce, and nowhere more so than years, we see proprietary research and in how they access their money. Starting MILLENNIALS AND THEIR MONEY 10 market analysis as a fundamental part in the US, and moving to South East Asia of our offering. As providers of the and Europe, we are taking a close look CARA O’NIONS HOW MILLENNIALS LIKE TO PAY 12 infrastructure through which so much at what millennials are saying about how MARKETING AND CUSTOMER of business and personal commerce INSIGHT DIRECTOR THE MILLENNIAL INFLUENCE 14 they want to pay and what this means for is conducted, we are uniquely well- the next generation of payments. HOW MILLENNIALS LIKE TO BE PAID 16 placed to explore and offer insight on emerging trends and behaviors For us this has already been a MILLENNIALS AND MOBILE PAYMENTS 18 in the way people and organizations fascinating journey, and we’re only want to access and move their money. at the first stop. This report offers a MILLENNIALS AND THE FUTURE 20 And, of course, customer insight is at snapshot of what young Americans are the heart of our own product strategy saying and thinking about their money, DESIGN FOR LIFE 22 development, so this research serves a and how they see the future unfolding. dual purpose – to support the industry One thing is certain, the assimilation of and enlighten our own innovation. technology into everyday patterns of behavior isn’t going to stop and we all need to respond – tomorrow will not be like today. 2 FOOTER DOCUMENT TITLE THE MILLENNIAL INFLUENCE 3 WHAT ARE WE OUR AIMS TALKING ABOUT? AND APPROACH 17% 8% 6% 14% 13% 4% 5,027 MILLENNIALS PACIFIC MOUNTAIN WEST NORTH EAST NORTH MID- NEW TOOK PART This is, by definition, a technical subject so let’s start by being CENTRAL CENTRAL ATLANTIC ENGLAND clear about our references and meanings. 50% 50% MALE FEMALE 38% 18–24 YEARS 13% 6% 19% 23% 25–29 YEARS WEST SOUTH EAST SOUTH SOUTH CENTRAL CENTRAL ATLANTIC 39% 30–35 YEARS MOBILE PAYMENT MOBILE BANKING MILLENNIALS Much has been written and important questions: how do millennials the opinions and behaviors of 5,027 pay for goods and services? Why do millennials across the US through the A mobile payment is any payment This means accessing and managing For our purposes, millennials are the said about the millennial they choose these methods? And, how leading market research provider Ipsos made from or via a mobile phone your bank accounts via a mobile phone generation of people born between the generation – their attitudes do they see behaviors and preferences MORI. Data was collected via an online or ‘cell phone’. This could be using – simple as that. For the purposes of 1980s and the year 2000 i.e. those who and expectations, ambitions evolving as technology advances? survey between the dates 26 April - 11 an application that sits on top of a this paper, if a person accesses their approached adulthood at or since the May 2016. contactless payment system such as account via a tablet while out and about turn of the millennium and who are now and concerns and, perhaps As a pioneer in the development and Apple Pay, usually used to pay for – in a coffee shop for example – that isn’t 18-35. most of all, their behaviors. integration of new payments systems, The specific aims of the study were to: low-value goods in a store. It could mobile banking, it’s online banking. Vocalink has an important role to play, ◼ Understand how technology and also be buying an app, music, digital For this study, we only interviewed They are, above all else, digital natives both in understanding the perceptions social media influences the lives of content or shopping through a mobile It is also possible to make a digital millennials with access to a smartphone – they’ve never known a world without and behaviors of millennials, and also millennials phone. In this way, most of us who interbank payment via a mobile banking or tablet and who hold a bank account(s). the internet and increasingly they can’t in helping the wider financial and app, but that wouldn’t count as a mobile commercial world to understand how have smartphones have made mobile imagine a world where most people ◼ Explore attitudes and trends in P2P payments at some point. payment either. In this study, mobile didn’t carry a phone in their pocket millennials’ preferences will impact their millennials’ current payment behavior payments refers to payments services or bag. And, given that there are so demands for products, services and the – and examine how this may evolve Person-to-person Mobile payments therefore offer, and operated under financial regulation many millennials – they are the largest infrastructure that supports commerce. in the future, looking in particular at: are increasingly being valued as, an and performed via a mobile device. So, generation since the baby boomers banking behavior; how money comes P2B So, we set out to research how alternative to conventional payments while all mobile payments are digital, of the mid 1940s to mid 1960s – it’s in and goes out of their accounts, millennials are using the payment methods such as cash, check and credit not all digital payments are mobile. not surprising to see the digital world including P2P, P2B, regular financial Person-to-business technologies and methods currently or debit card. tracking their behaviors closely and commitments, transport and day-to- available to them. Our initial study B2B looking for signs of what will be the day consumption ‘next big thing’. looks at the US, though we are also conducting comparable studies in SE ◼ Explore how millennials see and want Business-to-business The dramatic spread of mobile phone Asia and Europe. We held four focus payments to operate in the future. technologies around the world, in both groups with millennials – men and developed and developing economies, women aged between 18 and 35 – in and the rapid pace of development in New York City and Houston, Texas (11 the payments industry, prompt some and 12 February 2016), and surveyed 4 THE MILLENNIAL INFLUENCE THE MILLENNIAL INFLUENCE 5 MILLENNIALS AND THEIR TECH 98% 80% 57% 20% USE A SMARTPHONE USE A PC / MAC USE A TABLET USE A WEARABLE It should come as no surprise 98% OF MILLENNIALS USE MILLENNIALS VALUE SMARTPHONES TECHNOLOGY THAT CAN BE to anyone that millennials ADAPTED TO THEIR NEEDS and mobile technology are Perhaps unsurprisingly, Apple products inextricably linked: where feature highly in our findings and Smartphones have become an integral nowhere more so than here with 40% part of millennials’ daily lives, and one goes, the other follows. of millennials using an iPhone 6 or while older observers may believe that But we wanted to take a newer model. With 19% of millennials millennials have become slaves to their closer look at precisely which using another iPhone model, Apple phones, millennials themselves see them smartphones account for well over as sources of liberation, including the devices millennials are using, half of all smartphones in our sample. way in which they handle their finances. before going on to look at Samsung, again unsurprisingly, has ◼ 69% agree they couldn’t live without what they use them for. the next largest share, with 22% of millennials using a Galaxy S6 or newer, their smartphone and a further 19% using another ◼ 78% agree that technology gives Samsung model. them more control over their daily lives TABLETS HAVE YET TO ECLIPSE LAPTOPS AND PCS ◼ 83% say that they like technology that allows them to tailor things to fit While 57% of millennials use tablet their needs computers, the largest share of which ◼ 79% agree that mobile banking is use iPads of various generations, 80% easy to use. use PCs or laptops, 27% of which are Apple devices. ONE IN FIVE MILLENNIALS USES A WEARABLE DEVICE 20% of millennials wear their technology, either in the form of an Apple Watch (12%), Samsung Gear (9%) or other smartwatches (4%). 6 THE MILLENNIAL INFLUENCE THE MILLENNIAL INFLUENCE 7 SOCIAL MILLENNIALS 97% YOUTUBE 61% 94% FACEBOOK 78% 73% INSTAGRAM 45% 71% TWITTER 37% Total usage Use at least once a day Millennials are the first truly digitally connected generation and they have embraced social media enthusiastically – to the 78% extent that it has become an integral part of their daily lives. USE FACEBOOK AT LEAST Paradoxically, despite sharing many Of course, social media is a broad ONCE A DAY of their most intimate thoughts and category and millennials vary in their experiences on social media, they do use of different social media platforms. still have concerns about data security – Older millennials make greater a fact that will be of particular interest to use of Facebook, Twitter, Google+ banks and those in the payments industry.