Meeting the Billing and Payment Needs of Millennials
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The millennial generation is coming of age, taking on more financial responsibility and beginning to flex their financial and social muscle. Billing organizations must know how to serve and satisfy millennials’ unique billing and payment practices and preferences. Webinar Replay: http://fisv.co/millennial-payments-webinar Research Paper: http://fisv.co/millennial-payments-research
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Meeting the Billing and Payment Needs of Millennials
- 1. Meeting the Billing and Payment Needs of Millennials Roger Johnston, Ph.D., Research Scientist, Fiserv Eric Leiserson, Director, Market Insights & Research, Fiserv July 29, 2015
- 2. © 2015 Fiserv, Inc. or its affiliates. Agenda • Welcome and Introductions • Who Are Millennials and Why Are They So Important? • Financial, Billing and Payment Practices of Millennials • Key Takeaways • Q and A Dr. Roger Johnston Eric Leiserson 2
- 3. © 2015 Fiserv, Inc. or its affiliates. Who Are Millennials and Why Are They So Important?
- 4. © 2015 Fiserv, Inc. or its affiliates. The Millennials Are Coming and They Will Change Everything Millennials will make up 24 million new households between 2015 and 2025, substantially boosting demand for rentals and starter homes. Source: The Washington Post, Harvard University’s Joint Center for Housing Studies, 2014 4
- 5. © 2015 Fiserv, Inc. or its affiliates. “Generation Me” “Net Generation” “Echo Boomers” “Boomerang Generation” Who Are Millennials? 5
- 6. © 2015 Fiserv, Inc. or its affiliates.6 Many Things Come to Mind When Thinking of Millennials
- 7. © 2015 Fiserv, Inc. or its affiliates.7 Millennials Are More Diverse, Less Likely to Marry Young Sources: Census Bureau, Pew Research, 2014 78% 13% 7% 2% White, non- Hispanic Black Hispanic Asian/Pacific Islander Other 58% 14% 21% 6% 1% 1980 2012 Race and Ethnic Group, 15 to 34 Year-Olds 30% Less Likely to Marry compared to GenXer’s when they were ages 18-33
- 8. © 2015 Fiserv, Inc. or its affiliates. Financial Security is Highly Important to Millennials 8 70% 62% 60% 58% 58% Having financial security Healthy living Making a comfortable salary Having fun Exercise Which of the following goals are you working on now? Source: Millennial Research Study, The Principal Financial Group, 2015
- 9. © 2015 Fiserv, Inc. or its affiliates. $1.3 Trillion in direct annual spending 2020 Income is projected to exceed that of both Baby Boomers and Gen X 46% of U.S. income in 2025 Sources: Accenture, “Who are the Millennial Shoppers and What do They Really Want,” June 2013; Javelin Strategy, “The State of Millennials,” 2013 And They Will Have Unparalleled Economic Power Awaiting GenY Image from Corp Mktg 9
- 10. © 2015 Fiserv, Inc. or its affiliates. They Are Very Connected and Therefore Influential Sources: Accenture, “The Digital Disruption in Banking, “2014; Pew Research, “How Cool Brands Stay Hot ,” 2013 92% active members of social media 250 average number of Facebook friends 70% consult or post about products, brands and companies on social media 10
- 11. © 2015 Fiserv, Inc. or its affiliates. They Are Highly Mobile 54% 80% 90% 93% 96% Television Car Deodorant Toothbrush Mobile Phone How Millennials Rank the Importance of Life’s Everyday Items81% have a smartphone 72% active mobile banking users 33% Sleep with their Smartphones in bed Source: Bank of America and The Financial Brand, 2014; ComScore 2015; Pew Research Center 2014: Accenture, ”The Digital Disruption in Banking,” 2014, Bank of America Trends in Consumer Mobility Report, 2015 11
- 12. © 2015 Fiserv, Inc. or its affiliates. Financial Situation and Practices
- 13. © 2015 Fiserv, Inc. or its affiliates. 53% of millennials are living paycheck to paycheck Unemployment Rate Among Adults ages 25-32 Average Student Loan Debit 5.8 8.2 GenX Millennials GenX Millennials $15,000 $27,000 The “Screwed Generation”; Higher Unemployment and Student Loan Rates Source: Pew Research Center, 2014 13
- 14. © 2015 Fiserv, Inc. or its affiliates. Source: Millennial Research Study, The Principal Financial Group, 2015 Which of the following expenses do your parents pay for you each month 0% 5% 10% 15% Student Loans Car Payment Rent/Mortgagae Health Insurance Car Insurance Cell Phone Bills While Many Have Moved Back Home, Most Say They Are Responsible for Their Bill Payments 90% feel they are most responsible for funding their financial future including retirement 14
- 15. © 2015 Fiserv, Inc. or its affiliates. And this Group Is Very Optimistic 15 85% say they currently have enough money or will in the future Source: Pew Research, 2014
- 16. © 2015 Fiserv, Inc. or its affiliates. Millennials Use a Variety of Financial Services • 94% use online banking • 72% more likely to use non- financial services companies • 80% more likely to own a prepaid card Sources: Accenture, “The Digital Disruption in Banking, 2014; “Millennials with Money: A New Look at Who Uses GPR Prepaid Cards,” Federal Reserve Bank of Philadelphia with Phoenix Marketing International, 2014 • 67% interested in personal financial management tools 16
- 17. © 2015 Fiserv, Inc. or its affiliates. Unique Billing and Payment Practices of Millennials
- 18. © 2015 Fiserv, Inc. or its affiliates. Popular Millennial Bill Pay Methods Compared to All Generations Bill Payment Methods Used Last Month Source: 2013 Fiserv Consumer Trends Survey 10% 18% 40% 45% 55% 19% 24% 43% 49% 62% Non-Banking Website Phone FI Bill Pay In Person Biller Direct Millennials All Generations
- 19. © 2015 Fiserv, Inc. or its affiliates. Millennials Use More Billing and Payment Methods Which Impacts Customer Satisfaction Millennials use 10% more bill payment options and are 23% more satisfied with billers when more options are offered Multiple billing and payment options increases customer satisfaction 42% Millennials 30% All Source: Seventh Annual Billing Household Survey, Fiserv, 2014 19
- 20. © 2015 Fiserv, Inc. or its affiliates. 48% Pay Late Paid bills late in the last 12 months vs. 36% Average Make emergency payments 42% Millennials 30% All Millennials More Likely to Pay Bills Late and Utilize Emergency Payments Source: Seventh Annual Billing Household Survey, Fiserv, 2014 20
- 21. © 2015 Fiserv, Inc. or its affiliates. Millennials More Likely to Use Guest Checkout and Cards for Bill Payments 36% More used non- registered guest checkout bill pay option than average 27% More prefer cards to pay bills 21 Source: Seventh Annual Billing Household Survey, Fiserv, 2014
- 22. © 2015 Fiserv, Inc. or its affiliates. Millennials More Likely to Receive E-bills and Make Mobile Bill Payments Make mobile bill paymentsInterest in receiving e-bills Source: Seventh Annual Billing Household Survey, Fiserv, 2014 22
- 23. © 2015 Fiserv, Inc. or its affiliates. Millennials Have the Highest Interest Levels in Receiving E-Bills from Financial Institutions “How interested are you in trying an e-bill service from your primary financial institution?” 35% 19% 41% 47% 42% 46% 38% 39% 23% 35% 21% 14% All non- recipients Boomers/ Seniors GenX GenY Interested Not sure Not interested Source: 2013 Fiserv Consumer Trends Survey, October 2013 Millennials 23
- 24. © 2015 Fiserv, Inc. or its affiliates. For more insights: 24 Webinar Replay: http://fisv.co/millennial-payments-webinar Research Paper: http://fisv.co/millennial-payments-research
- 25. Meeting the Billing and Payment Needs of Millennials Roger Johnston, Ph.D., Research Scientist, Fiserv Eric Leiserson, Director, Market Insights & Research, Fiserv July 29, 2015