A recent study showed that almost two thirds (64%) of 18-25 year olds in the UK are now using a mobile wallet for selected purchases. The research carried out by MoneyMailMe, found 48% of young people believe that physical money will be phased out within 20 years, and 38% said they will stop using physical money long before that time.
This reveals a striking trend among Gen Z consumers and gives a strong signal to businesses targeting this demographic; young people are starting to prefer alternative methods of payments to cash, even for small daily purchases.
80% of survey participants claim to make daily purchases under £20, and 62% said they we’re frustrated by needing to use cash for these small purchases. This problem can directly impact a business’ bottom-line, with 15% of shoppers saying they would seek out another service provider over one that only accepts cash payments.
All this information re-enforces a clear trend among today’s youth; they are frustrated with physical money. Flexibility is what is important and that means having access to your money, when you need it, regardless of if there’s an ATM nearby.
For electronic payment companies this represents a huge potential market. Despite already being populated by big names there is still room for new start-ups to enter the space, especially for those that are willing to listen to the consumer base and identify underserved markets.
For example, 49% of respondents said that they regularly settle debts with their friends for amounts between £5 – £15 per month, but many do not consider using bank transfers due to high fees. This is a space where digital wallets can shine, companies that find the perfect balance between convenience, low costs to users, and revenue generation are primed to become some of the biggest players in this space.
The younger generation has grown up with mobile technology at their fingertips and for many of them cash is an outdated concept, especially when they know how many alternatives are available. Only 36% of those surveyed say that they currently don’t use a mobile wallet, and nearly all are interested in using one in the future.
What are your thoughts on the mobile wallet trend? Do you think the same trends will emerge in the Middle East marketplace? Let us know in the comments below and follow us on Twitter for the latest Payment News.