According to a study, more than two-thirds (65%) of over 65s say they are more open to using financial services or payment methods that are quicker and more convenient for them. While so-called ‘boomers’ are often labelled as technology-shy, the research suggests fintech companies overlooking this demographic are missing out on a sizeable customer base.
Nick Adams, Director and Payments Experience Specialist at Modulr. Having worked for PayPal and IngenicoGroup before joining Modulr, Adams has a wealth of experience in customers spending habits and has been able to recognise the impact of the instant economy on different age demogrpahics.
Speaking to The Fintech Times, Adams explained why and how fintechs can capitlise on the older age demographic’s willingness to use new financial services:
The Digital Now is here and it’s underpinned by the Instant Economy – an economy of instant experiences, instant information and instant services in both consumer and business lives.
If Netflix, UberEats, and Getir have taught us anything, it’s that we’re a society that’s come to expect instant experiences. We can get whatever we like, whenever we like, wherever we like. For consumers, it’s great but it’s a tough gig for businesses.
To make matters worse, these same businesses are potentially ignoring a huge portion of the population and as a result are falling further behind in the market, getting lost in the competition, as well as failing to live up to the promise of the Instant Economy. But, the good news is that it is possible to not only meet the expectations of today’s customers, but exceed them, and it all starts with the payments, often the laggard technology at the heart of every customer experience (CX).
The Netflixification of Payments
A huge part of what makes the Instant Economy instant is fast payment infrastructure (not only the speed of the payment rail itself but across the entire network). Just as you choose a film on Netflix and expect to watch it straight away, customers now expect to be able to pay for things easily and for transactions to be completed (and notified) within a matter of minutes, not days. We call this the ‘Netflixification of Payments’. But, too many businesses see the payments experience (PX) as something their CX simply has to work around, rather than seeing the PX as an elevator of CX.
It’s clear that to survive in the Instant Economy, digital businesses must optimise their payments infrastructure to ensure this demand is met, because it’s not going away any time soon. Some 65% of people often don’t have cash either on them or at home, prompting them to buy things through digital means. Even if cash or card is an option, a significant minority consider themselves lazy enough to abandon one merchant in favour of a merchant with pre-saved on smartphone-led payment options. And, this isn’t just the younger generations, according to our new research.
Boomers like digital experiences too
So-called ‘boomers’ are often, unjustly, labelled as technology-shy and this has led to an entire demographic that has historically been neglected by fintech. According to the study, more than two-thirds (65%) of over 65s say they are open to using financial services or digital payment methods that are quicker and more convenient for them.
Also, around half (47%) say their expectations of payment experiences have grown as a result of more online shopping and leveraging digital services during the pandemic. And, nearly three-quarters (74%) of over 65s say they use bank transfer and payment apps to make instant payments to friends and family, placing this age group just marginally behind 25 to 44 year olds, 87% of whom use this payment method.
Statistics like these shouldn’t really be that surprising, after all technological advancements transcend age-barriers. If processes make things easier for people and are simple to use, no matter who they are or what their background, they’ll most likely use them. Ultimately, it comes down to the user experience.
Digital businesses need to account for everyone in the Instant Economy – if they don’t, they’ll lose out on a sizable portion of revenue and fall behind in the market.
We know digital payments are a key part of the Instant Economy – and the research proves that not only do older generations use them every day, they enjoy doing so, which makes them a source of untapped potential.
What’s the answer?
It’s all about the butterfly effect of payments.
Firms need to look at their back-end payments infrastructure, as this has massive knock-on effects to the customer experience in the front-end. It’s what we call the butterfly effect of payments; for example, moving from batch-based payment processing to single immediate Faster Payments, with instant notifications. This provides the business, say a lender or money app, with operational efficiency benefits in the backend, and a reassuring and instant experience in the front end. This is just one simple example; the butterfly effect of payments can be applied across a plethora of payment processes and features.
For businesses struggling with their payments process, the writing is on the wall. They should adopt technology like this in their back-end processes without haste.
Thrive in the Instant Economy
For businesses looking to thrive in the Instant Economy, recognising every demographic is vital. Businesses must then evaluate if their customer experience is Instant Economy compatible. And, addressing their current payment experience is usually the best place to start. Not only will this enable businesses to keep up in the Instant Economy, but it will also meet the rising demand from customers – young and old – for fast, frictionless services.