The future of payments driven by Gen Z and Millennials - the merchants' perspective part 3

Seasoned payment managers from Jumia, Kinguin, Mango, TIDAL, Wargaming.net, and Wayfair share their expertise in a bid to further support peer-to-peer knowledge and provide our readers with an in-depth view of the merchants’ payment strategies

How do you see the future of payments driven by Gen Z and Millennials?

Sami Louali, EVP Financial Services, Jumia 

Payments need to be smooth, secure, and fun. The user experience is the key factor of success. The login must be seamless (e.g. biometric, PIN), the security must be the best in class (e.g. anti-account takeover, with two-factor authentication), the payment must be done as simply as possible. For the latter, we have been working on a One Click solution that will be released very soon on some of our platforms – on the food delivery mobile app. We are also building a whole ecosystem around our payment solution, JumiaPay, with a dedicated super app, on which you can pretty much pay for anything, from airtime recharge, utilities bills, e-vouchers, TV/music streaming subscriptions, and so on. We are simplifying the daily lives of our community, by bringing the most common services on a single platform.

Faheem Bakshi, Vice President of Payments and Exchanges, Kinguin 

Unbanked currency – Prepaid cards are one of the fastest-growing alternative methods, especially for Millennials, also because many younger consumers don’t have a bank account or a credit card. 

Cryptocurrency – Millennials today are aware of cryptocurrencies and their growth benefit, even if there is some volatility. This opens up an opportunity to introduce a secure payment method with a low transaction fee on international payments. 

Mobile wallet applications – They created several opportunities, like a cashback system, or even the option to pay bills via applications that drive such payments. Banks have now collaborated with such payment providers to expand their Millennial and Gen Z user base. 

User experience – A one-page checkout has better conversion than a three-page checkout. Millennials need to be able to make a quick purchase, and they need to make sure where to enter their payment details.

Carlos Madrona, Internal Control & Compliance, Payment Methods and Fraud Director, Mango

Among all the variables that influence understanding domestic economies, one of the most important ones is age. The year we are born, the generation to which we belong marks our way of saving and spending. The mobile phone is the main device through which new generations will make their purchases online. In addition, they tend to be carried away by the recommendations that different influencers offer through social networks. These generations are interconnected and that is where the difference lies; their needs are different from those of yesteryear. 

People who belong to this generation seek autonomy, govern everything they do with the palm of their hand, expect agility and security, and they seek to break standard protocols because they do not understand them. 

And how do we align ourselves from a payment methods point of view with all this? By giving value to things, payments have to stop being a pain point to become something natural that happens when someone wants to buy a product or service. 

This transformation will involve a great effort on the part of merchants, which we will only be able to achieve by collaborating with strategic partners, because it will evolve at such a speed that businesses alone will not be able to adapt in time and form to the continuous changes that they are going to come, for a long time. The merchant has no longer served to sign with a large payment provider – what’s important is creating links between partners that allow going hand in hand, creating a win-win strategy that is fully adaptable to changes in the shortest possible time. At Mango, we are already working on our Global Payments ecosystem, to bring the latest technology in payment methods to our entire network, no matter where the customer is or how they want to pay.

Melissa Gentile, Global Payments Manager, TIDAL

The future of payments will undoubtedly be influenced by Gen Z & Millennials. These generations are highly tech-savvy and mobile-native which inherently increases interest and demand for digital payments products. The importance of keeping up with payment trends will be crucial in maintaining relevance with this demographic. Peer-to-Peer (P2P) apps such as Cash App, which is a mobile payment service developed by Square, are also bound to continue gaining widespread usage and popularity. Beyond transferring funds between friends and family, these have already begun to add the ability to use as a digital payment method to pay for online bills and subscriptions. Lastly, cryptocurrency such as Bitcoin will surely be something that more merchants begin to adopt as consumers use it more in their day-to-day lives and will find its way into these payment methods and platforms to fulfil demand. 

Finding the crossroads between speed, convenience and security drives every decision regarding ecommerce. Consumers are savvier than ever and naturally demand more while the bar continues to rise. As the world becomes more digital, inevitably, commerce will continue to shift along with it and payments are at the forefront of it all.

Elena Emelyanova, Senior Payments and Fraud  Manager, Wargaming.net 

The future of payments overall will rather be driven by Generation Alpha – those who have just learned walking or barely speak, but already have a decent experience with modern e-gadgets and will never know a life without smartphones. Cash will not be an option for them since their views on money and how they shop will differ from Gen Z and Millennials. Our current average player profile shows that Millennials are still prevailing, although it varies from region to region, and we may see Gen Z stepping up. Although both generations are young, their online payment habits differ. Gen Z is more open to new payment technologies, as we have seen in the wake of the COVID-19 pandemic, for example, in Europe and Asia, where we have a big audience of this generation. They do care about the security of their funds even more than about their customer experience, that’s why extra friction due to SCA is not killing our conversion today as expected.

Attila Doğan,  Head of Product, Global  Payments & Fraud, Wayfair

The growing interest and usage in BNPL products can probably be attributed to a large extent to Gen Z and Millennials. Many Millennials do not own a credit card and shy away from credit so they see BNPL as an alternative. There is a clear value proposition by offering variable financing terms (many without added interest), there is the convenience part through easy access, and they are digital-first. I would not consider BNPL as payment options that take share of the existing methods, but rather as options that introduce online shopping to a whole new demographic – we see those as incremental and very much welcome this trend. 

A lot is currently being written about cryptocurrencies and, although they are intellectually challenging, we just have not seen customers ask for them nor do I personally see a particular value add for online shopping. When crypto matures into an accepted form of payment then Gen Z and Millennials are likely to be the ones driving this trend.