A Visa survey found that eight in 10 Millennials believe that they will one day be able to do all their shopping and bill payments online, while 73% believe this will be possible with a mobile phone
Thriving on a diet of online shopping, mobile banking and virtual games, young generation or Gen-Y believes that in future, new technology will allow them to dispense with cash totally, says a survey.
The research was conducted between June and July 2011 and more than 5,500 Millennials from across 11 countries including mainland China, Hong Kong, Indonesia, India, Philippines, Russia, Singapore, South Africa, South Korea, Taiwan and the UAE were interviewed by Visa.
According to Visa’s “Connecting with the Millennials” study, which featured interviews with over 5,500 young people across Asia, Russia and the United Arab Emirates (UAE), eight in 10 Millennials believe that they will one day be able to do all their shopping and bill payments online, while 73% believe this will be possible with a mobile phone. Visa defines ‘Millennials’ as those born between 1981 and 1991 and aged between 18 and 28 years at the time the survey was conducted.
We believe the Millennials play a significant role in boosting electronic payments in India: they have an active digital lifestyle and are constantly embracing new payments technologies. At Visa, we see mobile/online payments as a game changer and are providing the Indian Gen-Y with advanced and robust electronic payments technology to drive growth towards a cashless and a more efficient environment," says Uttam Nayak, Group Country Manager for India and South Asia, Visa.
According to the survey, a high proportion of Indian Millennials have an active digital life today and use their personal computer or laptop extensively for internet banking, online shopping, and bill payments. “Online shopping is becoming increasingly popular among young Indian consumers—they spend about 16% of their monthly disposable income online. Among those who purchase online, four in 10 make online purchases at least monthly, indicating a healthy appetite to buy online. However, 24% of the Millennials prefer cash on delivery as the most preferred payment method for online purchases, followed by debit card which is preferred by 21%," the survey said.
Debit cards are a preferred mode of payment for four out of every 10 Indian Millennials, and 47% prefer using it for high value payments of over Rs1,000. This shows a strong opportunity for growth of debit cards in the country in general.
The survey also identified an increasing inclination of Millennials towards electronic payment methods. 71% of the respondents look for security over convenience, acceptance, and flexibility when comparing different payment methods. The ability to pay after banking hours, usage while making unplanned purchases, maximizing rewards program, getting discounts and the convenience they provide over cash are the key drivers motivating the Millennials to use credit cards.
Interestingly, 38% of the Indian respondents who did not already own a payment card at the time of survey cited having a strong desire to own one in the near future, whereas 33% showed interest in owning a debit card and 24% in owning a prepaid card in the future.
Despite the steady growth of electronic payments in India, high inclination towards usage of cash is still seen as a key barrier in growth of non case transactions. According to the survey, Millennials still pay for 56% of the total expenses by cash. This is mostly true 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% of the Indian Millennials wish that they could make all their payments using their mobile phone and 79% wish they would be able to make all purchases and pay all bills online, hence, driving the move towards a cashless future, says the survey.
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