Hooked on to Digital Life, Millennial Shoppers Envision a Future Without Cash
Thriving on a diet of online shopping, mobile banking and virtual games, Millennials believe in a future where new technology will allow them to almost totally dispense with cash.
According to Visa's Connecting with the Millennials study which features interviews with over 5,500 young people across Asia, Russia and the UAE, eight in 10 Millennials believe that they will one day be able to do all their shopping and bill payments online. 73 percent believe this will be possible with a mobile phone.
Uttam Nayak, Group Country Manager -- India & South Asia, Visa said "We believe the Millennials play a significant role in boosting electronic payments in India: they have an active digital lifestyle and are embracing new payments technologies. At Visa we see mobile and online payments as a game changer and we're providing the Indian Gen-Y with advanced and robust electronic payments technology to drive growth towards a "cashless" environment"
The study highlights several interesting trends on the Indian millennials outlook towards finance and their payment behaviours. Indian millennials are independent with strong family values, hence, parents are seen as the main source of influence or advice when it comes to managing finance.
A high proportion of Indian millenials have an active digital life today and extensively use their personal computer or laptop for internet banking, online shopping, and bill payments. Online shopping is becoming increasingly popular among young Indian consumers and they spend about 16 percent of their monthly disposable income online. Among those who purchase online, four in 10 make online purchases at least monthly, indicating a healthy appetite for buying online. However, 24 percent of the millenials prefer cash on delivery as the most preferred payment method for online purchases, followed by debit card which is preferred by 21 percent.
There is a strong opportunity for the growth of debit cards in general as it is the preferred payment product for four in 10 Indian millennials and 47 percent use it especially for high value payments of over Rs. 1,000.
The survey has also identified several drivers that indicate how millennials today are increasingly embracing electronic payment methods. 71 percent of the millennials interviewed look for security over convenience, acceptance, and flexibility as the most important product features across different payment methods. Ability to pay over time, use for unplanned purchases, maximizing rewards program, getting discounts, not having to carry cash and convenience over cash are the key drivers motivating the millennials in India to use credit cards.
Interestingly, 38 percent of the Indian respondents who don't already own a payment card cited having a strong desire of owning a credit card in the near future, whereas 33 percent have shown interest in owning a debit card and 24 percent in owning a prepaid card in the future.
Despite the steady growth of electronic payments in India, heavy usage of cash is still seen as a key barrier. According to the survey, millennials still pay for 56 percent of the total expenses by cash. This is majorly for payments of low value products. Issues like low acceptance, uncomfortable for small purchases, apprehensions around mischarges and safety are among some of the barriers.
The future holds an enormous opportunity especially for mobile payments and online payments in India as 76 percent of the Indian millennials one day wish to make all their payments using their mobile phone and 79 percent wish to be one day able to make all purchases and pay all bills online, hence, driving the move towards a cashless future.
Looking at their transaction behavior today, young consumers are already living the digital life with sixty three percent of those surveyed saying they are already transacting online using their personal computers or laptops, and nineteen percent on their mobile phones.
On average, about 15 percent of a Millennial's monthly income goes towards online shopping alone, with much of it being spent on general shopping, entertainment, household items, travel and groceries.
Eight out of 10 Millennials are online shoppers, half of which say they shop online monthly. Millennials from Korea (76 percent), Taiwan (53 percent) and mainland China (84 percent) top the list of online shoppers who shop at least once a month.
Credit and debit cards are popular methods of paying online. Forty percent of young online shoppers say they usually use a credit card, and 37 percent a debit card, to make a purchase over the Internet.