Goldman Sach recently published an amazing infographic that details exactly why there’s so much fuss over the so-called Millennial generation (those born between 1980 and 2000). Here are a few highlights:
- Millennials are the largest generation in history, at 92 million people in the U.S. alone. Compare that to 77 million Americans who are, or were, part of the Baby Boomer generation
- They use technology to make better informed decisions on the fly. As one example, 57% compare prices in stores, often using their mobile devices to do so.
- Social media plays a big role in their overall social behavior. In fact, 34% of Millennials say they like brands that have a social media presence better, compared to just 16% of older consumers.
In summary, Millennials are quickly becoming the main consumer force in America and beyond, and everyone is trying to figure out how to better sell to them.
A changing payments landscape
Small businesses need to adjust as well. In addition to thinking about ways to make your products and services more compelling to younger buyers, it’s important to make payment easier, as well.
Our research shows that small businesses are doing a better job of accepting credit cards, which is an important starting point. As we’ve written before, the vast majority of consumers prefer to pay with credit or debit cards, and small businesses are making more money from card transactions thanks to getting on board.
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Small businesses must accept peer-to-peer payments
Another avenue worth exploring to attract younger consumers who’ve grown up with social media is accepting payments from peer-to-peer applications like Venmo or Square Cash. If you’re not familiar, these payment apps allow consumers to pay each other, which is helpful if you’re splitting a restaurant bill, bar tab, or just want all your friends to know where you’re spending money.
Here’s how Fortune Editor Adam Lashinky recently described Venmo, which processes about $8 billion in peer-to-peer transactions every quarter:
If you haven’t used Venmo, it’s tough to understand what millennials might have to do with cash transfers. The reason is that Venmo makes it easy to tell one’s friends about transactions, like: “Just split a meal with Britney.” I use Venmo, which fundamentally works a lot like PayPal and Square Cash, in that it links to a checking account and makes it easy to send cash to personal contacts.
One of the interesting aspects of peer-to-peer payment apps is that Millennials, in particular, treat them like a social media platform, kind of like Facebook, Instagram, or Twitter. They login to see what their friends are doing, not just to send them money.
If younger buyers are attracted to the uniqueness and originality of your business in the first place, it’s likely that they’ll want to share the fact that they’ve spent money with you online, as well. So, accepting payments from these kinds of apps could be beneficial in two ways: first, because Millennials like to make their payment experiences social and simple, and second, because it’s free publicity when others see that their friends patronized your business.
If you’re not accepting credit card payments, start there. If you are, consider whether accepting peer-to-peer app payments is right for your business.