The use of digital payments is no longer restricted to young, tech-smart consumers, but increasingly reflects the attitudes and functional needs of shoppers across generations, a study by McKinsey has found.
Marie-Claude Nadeau, a partner in McKinsey’s San Francisco office, discussed this subject at Money20/20 in Las Vegas, an event held by Ascential, which is also the owner of WARC.
According to McKinsey’s Digital Payments Survey – a study produced every year since 2015 – the digital payments user base increased by three percentage points year on year in 2019, reaching 77% overall.
“Everyone across the spectrum of age and income uses digital payments – or, at least, three-quarters of everyone,” Nadeau said. (For more, read WARC’s in-depth report: Understanding the four user groups for digital payments.)
“Digital payments are mainstream. This is not a millennial fad; this is not something that Gen Z is picking up; this is not something that the Baby Boomers are not exposed to.”
McKinsey broke out uptake levels by demographic, defined as people who have conducted in-app transactions, made in-store payments, purchased goods online and/or engaged in peer-to-peer money transfers.
And uptake levels, it was reported, stood at 91% for Millennials, as well as 80% for members of Generation X and 64% among Baby Boomers.
“We’re really seeing this being a mainstream effect,” Nadeau said. “And, now, when we do a survey of digital payments users, we’re really surveying the full population.”
If the earliest users of digital payments were tech enthusiasts, other cohorts are now growing in relative importance as such transactions become the norm.
A case in point: offer junkies, explained Nadeau, are “value seekers” that possess a clear and simple rationale for their digital-payments strategies.
“They’re the ones who say, ‘Okay, I’ll adopt these digital payments technologies, but it really has to bring me more money,’” she said.
“So, they like features, like store and coupons offers; they like the idea of paying with points. And that’s a segment that’s been growing pretty strongly over time.
“They’re starting to say, ‘Well, I realized there’s all these technologies out there. It has to bring me something else.’”
Sourced from WARC