How To Meet Finance Needs Of Gen-Z
Updated: Oct 19
The 2020s are going to be the decade when Generation Z-ers come into their own. As a generation, they are expected to outnumber the millennials globally this year and the oldest members of the 16-24-year-old age group are entering the workplace with money to spend.
But they will spend differently than all previous generations. They don’t know a world without the internet and thus are at home with digital innovation. They expect businesses to offer them convenience and cost-effectiveness when they save and spend.
Marcie Merriman, an executive director at Ernst & Young, encapsulates the generation in a World Economic Forum blog, Generation Z will outnumber millennials, saying,
“They were born into a social world of likes and shares, constantly connected by smartphone, tablet or computer to online shops, payment and banking services. They have grown up with instant information and interaction with friends, relatives and peers. The link to technology is inherent in the way Gen Z-ers think and act.”
She notes that this generation has increased awareness of how and where they spend money because they have experienced a world of constant change and disruption. All this means that they are likely to be the generation that has the most profound impact on the payments industry as they grow in importance as a significant part of the working population.
The one consequence of this generation’s preferences is likely to be the predominance of mobile payment solutions in their lives. While mobile usage has been growing, Gen-Z promises to tip the balance to a mobile-first way of life.
The results of a Payfast survey confirmed this significant shift, with the payment provider predicting the pre-eminence of mCommerce. It found that almost half of the Gen Z respondents (47%) shop more on a mobile device than any other technology.
The increasing preference for mobile as a payment solution has been supported by the proliferation of smartphones and rapid enhancement of smartphone technology, the survey finds. Consumers also increasingly expect to be able to make purchases when and where they want and are comfortable with making in-app payments, with more than a third of the Gen-Z using a mobile wallet compared with 26% of the other respondents and 14% versus 10% of other consumers regularly making payments on a mobile wallet.
What does this mean for companies operating in the payment space?
Companies will need to offer innovative mobile-based payment facilities if they want to keep pace with Generation Zers appetite for payment innovations. These solutions will also need to be affordable and make their lives easier. Payment solutions will also need to have wider functionalities, enabling them to save and invest and make the sound financial choices that are a priority of this generation.
Says Merriman: “Today’s teenagers expect goods to be delivered to them and demonstrate low, or no, brand loyalty. To engage with Gen Z-ers businesses will have to innovate to get noticed.”
Given that many of them are already making payments on mobile wallets, and some of them regularly, companies wanting to capitalise on this growth market should consider offering branded mobile wallets. Not only do these provide the services needed but they have the flexibility to accommodate technological advances quickly and effectively and allow customers to engage meaningfully with the brand.
Currently, mobile wallets can be set up to offer users a range of functionalities, including payments, cross-border payments, loyalty schemes, discount vouchers, rewards programmes, financial education and other financial services.
What does this mean for employers?
Employers also have a great, often underappreciated, opportunity to meet the needs of the Gen-Zers. By creating seamless digital experiences for employees, companies are able to build long-standing loyalty. One particularly powerful way to introduce a company-branded, white-label mobile wallet payroll solution.
A mobile wallet allows a company to reinvent the employee experience so crucial in today’s competitive labor markets. Employees, particularly Gen-Zers, no longer consider work a 9-5, completely separate, part of their lives. They are seeking an employee experience that is meaningful and fulfilling and one that seamlessly connects with the rest of their lives.
Most employees are already living digital lives and offering them access to a mobile wallet that adds value to their lives will enhance the connection a company has with its employees, particularly the young, digitally savvy and hungry Gen-Zers.
Among the benefits of incorporating the company’s payroll solution into a mobile wallet are that you can develop a range of financial functionalities around this, which ensures the uptake of the wallet. The potential functionalities the company can offer employees on a mobile wallet include online and in-store transactions, online payday loans, loyalty schemes, deals and bonuses, financial guidance and retirement planning tools.
It could also serve as a valuable, untapped internal communication tool that allows the employer to communicate about financial wellbeing and financial services. Currently, employees typically receive information on financial services only from banks, investment companies, and loan providers. Taking advantage of this relationship-building potential communication medium would go a long way in enhancing employee wellbeing and their experience of the company.
Adopting a mobile wallet also gives companies access to information about the behavior, needs, preferences and aspirations of their employees. This information could be used to tailor the company benefits offered to employee needs and aspirations.
Developing a company-branded wallet is easily achievable and doesn’t require a huge financial outlay or investment in technology. Companies that develop white-label wallets on behalf of companies can customize a mobile wallet solution to an employer’s exact specifications. The developer will build the solution, implement it and provide the training necessary to encourage the uptake of the mobile wallet.