Gen Z drives mobile payments

Mobile payments are slow to catch on among the general population of shoppers, but the emerging Generation Z is more than twice as likely than others to make a mobile payment.

Smartphones, tablets and other mobile devices account for just 3 percent of all mobile transactions in the United States, but for Gen Z, that number is closer to 7 percent, according to a new GfK study.

GfK is defining Gen Z as ages 18 to 24. Most accepted definitions of this demographic include those born from roughly 2000 on. The study's group is closer to a younger cohort within the larger millennial group. For the purposes of this study, GfK identifies older millennials as Generation Y (ages 25 to 34).

According to GfK, more than half (53 percent) of Gen Z have made a mobile payment while using the Internet in the past six months, nearly four times the rate (14 percent) of Baby Boomers. Older millennials made mobile payments at the rate of 37 percent and Generation X (35-49) was predictably in between at 27 percent.

Roughly one third of Gen Z shoppers believe that mobile payments are more secure than other methods. And more than half of the younger group are looking forward to making "more and more transactions" from mobile devices, according to the study.

"Many consumers today do not understand the value proposition offered by mobile payments," said Tim Spenny, VP of GfK's financial services team. "This creates an opportunity for the industry to develop its own narrative around why people should use mobile devices to pay for their purchases—with security, speed and ease of use top among the reasons. In 2016, we see mobile payments gaining traction through the addition of benefits such as rewards, discounts and coupons that are integrated into phone payment systems."

Apps in particular present a big opportunity for those retailers large enough to support them. Walmart and Kohl's report strong mobile wallet activity, and an earlier study by Verizon showed that 70 percent of millennials used an app to make a purchase last year.

For more:
-See this GfK study summary

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