Don’t believe the hype. Millennials still prefer to use cash and checks over online or mobile payment methods. Despite the buzz about Millennials abandoning traditional forms of payment, a new report by Aite Group shows 58% of Millennials (ages 26 to 34) and 53% of Millennials (18-25) wrote checks last year to pay another person. This refutes the idea that this group prefers to us mobile and internet methods for person-to-person (P2P) payments. The report was based on a survey of 1,700 participants.
Still online and mobile P2P alternatives are gaining ground. Paypal is the clear leader in online P2P payment providers. 49% of participants said they used the service last year. Paypal is also first among electronic methods, with 5.7 P2P transactions per household. As far as mobile-payment methods go, mobile banking leads the way with 1.4 transactions per household. In second place is Venmo (a service acquired by PayPal in 2013) at 0.6. Bringing up the rear is Square, which makes up for 0.3 P2P transactions per household.
Paypal’s complete dominance in P2P payments probably has a lot to do with its sheer tenure; it has been around since 1998 after all. So what accounts for the other rises in electronic and mobile payment methods? As far as the boost in mobile payments goes, the outrageous integration of smartphones into the daily lives of consumers has made mobile P2P almost a necessity. Over 79% of Millennials and Gen Xers (ages 35 to 50) own a smart phone, and about 60% have a tablet. These numbers are predicted to continue to grow. And as generations are born and live with smart phones and tablets, they are expected to do more shopping and payment processes on these devices.
Retailers must be able to process more advanced forms of payment like electronic checks, P2P payments, and mobile payments to maintain a healthy and profitable relationship with customers. This is especially important if you are a high risk merchant. EMB provides a payment gateway for high risk merchants that enable them to process a variety of payments like debit/credit cards, checks, electronic check processing and more.