Gen Z Ditches £3bn More In Online Purchases Than Over 65s
Barclaycard Payments, a global payment business which processes nearly half of the UK’s credit and debit card transaction, has released new research that shows 69% of 18-24-year-old consumers ‘shop and drop’ when online, compared to 42% of over 65s.
According to the research, the average monthly value of baskets abandoned by the younger group is also more than double; £156.40 vs £63.90, meaning retailers miss out on £6.5bn in potential sales each year, compared to £3.5bn from older shoppers. This is despite there being more than double the number of UK adults in the 65+ bracket.
The value of sales abandoned by Gen Z consumers is higher than any age group, despite the research showing 25-34 year-olds’ shop online more frequently (5.4 times during an average week, compared to 4.4 times for 18-24s).
Online shopping increase
The Barclaycard Payments research comes at a pivotal moment for e-commerce brands, with online transactions consistently growing, there was a 45.9% increase in May 2021 compared to May 2020, according to their stats. Meanwhile, industry regulation such as Strong Customer Authentication (SCA) requires merchants to comply with new fraud protection protocols – which in turn could add time at the checkout.
Marc Pettican, President of Barclaycard Payments, said: “It’s vital online retailers understand and cater to the preferences of all their customers, but it’s the unpredictable behaviour of younger shoppers most likely to have the biggest impact on the bottom line. Our research shows this group tend to be less patient, less loyal and more likely to drop out at the point-of-purchase than their older counterparts.
“More broadly, with online shopping continuing to grow and the deadline for full SCA compliance looming, retailers need to remove as much friction as possible from the checkout process. Products such as Barclaycard Transact can help to speed up customer verification and reduce the sales merchants miss out on through abandoned baskets.”
A shift to digital payments
COVID-19 increased the urgency for banks to transform their payment systems as digital payments soared. A report from Accenture forecasts nearly 420 billion transactions worth US$7 trillion are expected to shift from cash to cards and digital payments by 2023 – and increase to US$48 trillion by 2030.
“The pandemic will permanently change how consumers shop and pay for products as they prioritise convenience above all else. While banks’ investments in new payments systems have focused primarily on meeting compliance deadlines, the way they will drive value moving forward is by embracing the changing consumer dynamic and improving the customer experience.” said Sulabh Agarwal, who leads Accenture’s Payments practice globally.
Nymbus enters strategic partnership with Plaid
Nymbus, a leading provider of banking technology solutions, has partnered with Plaid, a data network powering the digital financial ecosystem, to more instantly authenticate and fund customer bank accounts for financial institutions.
This new integration will allow Nymbus bank and credit union clients to securely onboard new users in a matter of seconds, which in turn translates to more active and engaged banking experiences. Plaid’s data network enables consumers to connect their financial accounts at over 11,000 institutions globally to more than 5,000 digital finance apps, including leading payments, investing, and budgeting tools.
What are the benefits of the integration?
Benefits of the Nymbus and Plaid integration for financial institution customers include:
- Improve user identity verification and reduce fraud.
- Instantly authenticate and link members’ bank accounts.
- Streamline ACH transfers between any bank or credit union in the US.
- Access and analyse comprehensive transaction data.
- Validate real-time account balances to protect against overdraft and enable account pre-funding.
“As more consumers than ever before rely on digital finances for their everyday lives, financial institutions need to meet their customers where they are while supporting safe and reliable money management experiences,” said Sarah Howell, Chief Alliance Officer at Nymbus. “Our expanding network of partners are important contributors to Nymbus’ combined portfolio of the technology, people and process available to quickly innovate with new routes to market and revenue streams.”
Continuous growth and expanding partnerships
Founded in 2015, Nymbus has continued to grow. Most recently the company has closed a new round of financing led by the Curql Fund. The US$5 million investment will be used towards Nymbus CUSO and accelerate a shared commitment to breakthrough technology for ensuring continued growth and stability for the credit union community.
Nymbus CUSO was founded in March 2021 to help break through barriers to growth, and its mission is to connect credit unions with trusted fintech offerings that both simplify technology delivery and enable new digital revenue opportunities.
Last year Plaid set a goal to move 75% of its traffic to APIs by the close of 2021, calling it “one of our top priorities as the industry moves full-steam ahead toward a fully digital financial system.”
Recently it has announced an open finance partnership with Capital One, a digital finance innovator, and the successful completion of its migration to the Capital One API. They have also completed or have in-motion data access agreements with major US financial institutions, including U.S. Bank, JPMorgan Chase, Wells Fargo, and others.