Millennials Replacing the Money Phone with Mobile Payments
- 32% of black people made a mobile payment in 2016
- In 2016, mobile payments in the U.S. totaled $112 billion
The money phone is soon to be a relic of the past as more millennials look to their smartphones as the primary means of making financial transactions. What are banks and financial technology companies going to have to do to respond to the needs of this coveted group of consumers?
Why This Matters: Mobile payments are the future of commerce in the U.S. as they are set to exceed $312 billion by 2020, according to data from eMarketer. Survey data from WPP (WPP -0.53%) subsidiary J. Walter Thompson Intelligence shows 63% of millennials in the U.S. rarely use cash. Further, 75% of U.S. millennials say they want a broader range of products that align with their lifestyles and needs.
Black people are more likely to make mobile payments than any other ethnic group in the U.S. In 2014, 32% of Black people made mobile payments, according to a survey by the Federal Reserve. African American black teens are the biggest users of mobile phones and they tend to set the tone for consumer choices. Payment providers, retailers, and banks have an incentive to provide products that seamlessly facilitate the consumption choices black consumers are guiding the rest of U.S. consumers to make.
To date, companies like Apple (AAPL -0.23%) have struggled to get traction with consumers on their payment applications. The number of iPhone users who have tried Apple Pay at least once is stuck around 19%, according to analysis by venture capital firm Loup Ventures.
What’s Next: Wells Fargo (WFC +0.06%) recently announced Pay with Wells Fargo, a modification to the bank’s mobile app that (WF +/-%) will allow users to access mobile payment options from the app’s home screen without logging in. The bank is rolling the update out to its employees before releasing it to the public later in 2018.
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