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Gen Z: How Their Digital Payment Preferences Will Drive Innovation

Generation Z were the first kids born into the age of social media and mobile phones. Now they’re growing up, starting careers and earning incomes that are expected to total an eye-watering $33 trillion by 2030.  For those keeping count, Gen Z will constitute a quarter of the global GDP. 

As Gen Z flexes their economic might over the next decade, business leaders are realising this is a generation like no other. The only world they’ve ever known is digitised and mobile. And while some poke fun at their short attention spans, the truth is that Gen Z has to cover a lot of ground in a rapidly expanding digital landscape.

Gen Z is different in another important way as well. Rattled by job insecurity and soaring inflation, Gen Z is more concerned about saving money than previous generations. 

This is a lot to unpack for businesses trying to understand Gen Z. Selling to them won’t be easy, but it will be necessary. And for those companies that can adapt, the upside of Gen Z’s buying power will far outweigh downsides like a shorter attention span.

In this article, we pick out some insights from GGV Capital’s portfolio company Thunes’ recent global study of Zoomers’ shopping, social and payment preferences

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Digital natives 

Born between 1997 and 2012, Gen Z is the first truly digital generation. They play online, work from home, and meet friends on social media. 

They pay with phones instead of cash, and most do not even have a bank account, opting instead for the convenience of mobile wallets. They devote more hours to surfing the net than sleeping, and they spend more money shopping online than they do on travel and dining out combined.  

They also absolutely love social media. With more than nine in ten Gen Zs checking TikTok, YouTube, Facebook and Instagram multiple times a day, it will come as no surprise that most have bought products they first discovered on a social platform. 

In fact, Gen Z has become so immersed in the digital world that a majority now say they prefer their online identity to the one they have in the real world. This change in human behaviour should keep every marketing leader up at night. Instead of connecting with a real person, they are increasingly selling to a person’s superhuman digital representative.  

It’s a shift that’s culminating in the Metaverse, where Gen Z can meet, play and create in an all-digital world like BUD, which has quickly become one of the most popular social apps in almost 40 countries. 

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Gen Z and the Metaverse  

The boundless imagination of the Metaverse brings us to another important point about the digital world of Gen Z. It’s a place where many limitations of the physical world just melt away.  

Are they going to waste time travelling to an office when they can work remotely from anywhere? Will they fight for parking at a store when there are a million stores at their fingertips – literally – thanks to a mobile phone? The questions answer themselves. 

Gen Z isn’t anchored to a desktop computer or limited to shopping at their local mall. They carry these things and much more on their mobile phone.   

To learn more about a Metaverse engineered by Gen Z for Gen Z, check out our podcast feature with Risa Feng and Shawn Lin of BUD.

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Going mobile 

About 5.3 billion people now own a mobile phone, and an overwhelming 92% use it to access the Internet. Unsurprisingly, this is being fuelled by the digitally native Gen Z, especially in emerging markets where they are bypassing conventional technology like landlines, dial-up and desktops; and leapfrogging straight to mobile.

If a business wants to reach Gen Z, they need to do it through their mobile phone. More than 60% of Gen Zers already prefer mobile devices for digital purchases, while the share of Gen Zers using mobile apps for in-person payments is expected to reach 19% from just 5% now.

They have a lot to choose from. While PayPal, Cash App and Venmo are favoured by Gen Z in the United States, it is Apple Pay in the UK and a host of local players in emerging markets, including M-Pesa In Kenya, GCash in the Philippines, bKash in Bangladesh and PayTM in India.  

Is the rise of mobile payments the beginning of the end for debit cards and cash? While 35% of Gen Z use debit cards for in-person payment now, only 26% expect to use them in the future. As for cash, although 37% are handling paper money today, just 22% expect to do so down the road. 

If the future of work is remote and the future of shopping is online, it’s likely the future of payments will be mobile. 

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Fickle tastes and short attention spans

According to Forbes, the attention span of Gen Z has declined to just eight seconds from the 12 seconds typical of millennials. Apparently, that is even shorter than a goldfish’s attention span, which comes in at a respectable nine seconds.  

But critics are interpreting this the wrong way. Gen Z is not less patient because they are less interested. They just have much more to explore than a bored goldfish in a small bowl.  

Gen Z has more screens open, more apps downloaded and a lot more information-dense video to process than all the generations that came before it. So, yes, they may spend less time focusing on a single activity, but they spend more time on a wider range of activities. 

This has significant implications for businesses. It means Gen Z is less interested in unflinching loyalty to one brand when they are exposed to so many. And it means they are actively looking for innovative, authentic user experiences that will grip their attention for more than those eight seconds. 

If a seller can deliver more tangible value, they will receive more attention. And that attention will eventually evolve into trust, because although Gen Z is more likely to abandon a brand that does not meet their expectations, surveys show that trust in a brand is still their primary reason when choosing companies for payments and other services. 

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Gen Z will rule the world 

What can we take away from these findings? Gen Z is not necessarily easily bored and uninterested in relationships. It is just the opposite. In a digital world crowded with distractions, they are busy searching for authentic experiences and brands they can trust. 

For businesses that can rise above the noise and deliver the connections that Gen Z craves, there are a lot of rewards. About 33 trillion of them. 

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