Younger consumers leading alternative payments shift

Younger generations are leading the adoption of alternative payment methods (APMs) such as e-wallets and bank transfers, with 42 per cent of Millennials and 35 per cent of Generation Z consumers having used these.

A survey of 1,000 consumers in the UK and 1,000 in the US by Arlington Research for payments platform PPRO found that security of their data and money is the most important aspect when choosing a payment method, with 81 per cent of all respondents citing this as a priority.

The survey found that the COVID-19 restrictions have meant UK consumers were more inclined to try a range of digital payment methods to enable a convenient and safe transaction experience.

Currently, 89 per cent of UK consumers are confident using PayPal, while a further 31 per cent are confident using mobile wallets such as Apple Pay or Google Pay. This form of payment is particularly high for younger generations, with 68 per cent of Generation Z stating they use mobile wallet technology.

For younger generations, seeing a buzz about new payment methods in the news and on social media has been a key driving force for local payment adoption: 31 per cent of Generation Z consider this the biggest motivation to try new payment methods, while for Millennials, 37 per cent said that merchant acceptance is their main driver.

For the overall UK population, security was ranked the top adoption driver, even above reputable brand image, with over half (59 per cent) of UK consumers stating security was the most important influence on their usage of new payment methods.

PPRO said this highlighted the growing need for online merchants, payment service providers and FinTechs to address consumer perceptions around trust and assure the security of payment methods at checkout.

James Booth, head of partnerships for EMEA at PPRO, said: “Local payment methods, such as direct bank transfers and pay later schemes, are considered new ways to pay in the UK - however, for online merchants that sell to consumers across borders, these local methods are the norm and must be offered at the check out to reach international consumers."

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