For younger consumers who have grown up using apps to make purchases, in-app payment options are becoming a deal-breaker. Recent data shows that nearly two-thirds of Gen Z and millennial respondents say they’ll take their business elsewhere if in-app payments aren’t available.
The study from NMI found that 70% of Gen Z respondents use an app to pay for something at least once a day. While only 50% of respondents reported making in-app payments weekly, a slightly higher share (55%) expect to increase their usage this year.
Most consumers say it’s important for merchants to offer app-based payments, and half would choose a business that does over one that doesn’t. These preferences stem in part from the efficiency of in-app payments, which allow merchants to serve more customers with faster point-of-sale throughput without needing additional staff.
The subscription model—automatic recurring payments for frequently used services—is also more popular among millennials and Gen Z compared to other generations. As these cohorts make up a growing share of the consumer economy, ease of use in payments is becoming even more of a necessity.
Parents Like Them Too
In addition to younger generations, busy parents are among the biggest supporters of app-based payments. Nearly three-quarters of parents with children under 25 living at home say they would prefer to pay for everything through an app if they could.
Older consumers, however, are less familiar with these methods. More than half of baby boomers use in-app payments only a few times a month or less, and fewer than half say they’d pay for everything through an app if it were possible.
A Wide Range of Businesses
Respondents said they were especially eager to use in-app payments for food and beverage purchases, including at restaurants, coffee shops, bars, and delivery services. Retail came in second, with entertainment and recreation tying with transportation and travel for third place.
“Buy online and pick-up in-store, or BOPIS, became very popular during the pandemic when everybody was looking for a no-touch interaction,” said Don Apgar, Director of Merchant at Javelin Strategy & Research. “Now consumers want that same convenience to avoid lengthy checkout queues at fast food restaurants, transit venues, theme parks, etc. Ordering ahead adds a ton of convenience, but the ability to pay in advance takes the customer experience to the next level.”
Consumers are also looking to pay through apps in some unexpected sectors. These include areas like car washes, dry cleaning, and home services such as landscaping and plumbing.
The post Younger Generations Insist on Paying Through Apps appeared first on PaymentsJournal.
