VocaLink, the global payment partner to banks, corporates and governments, today launched “The Millennial Influence”, a report examining the payments behavior of millennials (i.e. those aged between 18-35) in the United States.
The research, showed that millennials were more risk averse than expected with one in four having ceased making mobile payments due to security concerns. In fact, 70% of US millennials would be more likely to use a new mobile payment service if it was provided by their own bank, citing their bank as the most secure option. Two thirds of this group are more open to finger print biometrics than outdated chip and pin, due to the increased security. Almost three quarters agree that they would like to be able to make instant mobile payments to both businesses and people regardless of their banking provider.
Cara O’Nions, Director of Marketing and Customer Insights at VocaLink commented, “Surprisingly, the element of ‘trust’ and ‘security’ was a priority for many of the millennials we spoke to, and as a result felt strongly that their bank was the preferred provider of payments technology. However, it is clear they still want to see further innovation from all payment providers, to respond to their need for ubiquitous and reliable instant mobile payments. At this stage, while a number of fintechs are still in the process of developing and fine-tuning their products and services, the banks have a substantial head start to provide or support a superb customer experience.”
As part of a global study undertaken by VocaLink into the attitudes of millennials towards payment services, over 5,000 millennials across the US were surveyed. They were asked questions about their current banking behavior, use of payments technology and what services payments providers should offer in the future.
The report also explores the existing footprint of mobile payments technology in the US. Mobile payments are used by 52% of millennials, however 86% of millennials using contactless mobile payments have encountered problems when attempting to pay for something. Furthermore, a quarter of millennials who have tried using their mobile as a payment method have stopped due to security concerns.
When asked about how they expect payments technology to evolve in the future, two thirds of millennials would prefer to use biometric technology for security over a pin or signature, with fingerprints being the preferred option (67% preference).
Concerns over security seem to be paramount and are one of the major obstacles to the adoption of mobile payments amongst millennials with an overwhelming majority (80%) that want their bank to guarantee the security of cell phone, both in terms of transactional security and the physical security of losing or breaking their device.
David Yates, CEO at VocaLink concluded, “This research into US millennials attitudes’ to payments is part of our longstanding commitment to play a leading role in the discussion about the future of payments systems globally. As providers of the infrastructure through which so much of business and personal commerce is conducted, we are uniquely well placed to explore and offer insight on emerging trends and behaviors in the way people and organizations want to access and move their money, as well as provide the technological solutions to the demands of the consumer.”