Digitalization has taken the mainstage in the payments industry due to changing consumer preferences, and now, in the midst of the COVID-19 pandemic, necessity. According to the 2020 ACI Speedpay Pulse report, one in four consumers has increased their usage of their biller’s website to pay bills, while one in five has decreased the number of payments they send by mail or make in person at a physical location. In addition, more consumers prefer digital statements (48.2%) to paper statements (25%), while around a quarter prefer to receive both digital and paper (26.8%).

While consumers as a whole, regardless of age, are migrating away from traditional payment methods toward digital ones, they lack synchronicity. As you might guess, each generation has different preferences in how they send and receive payments, and how they manage their bills overall. Looking ahead to the rest of 2020 and beyond, it will be critical for business leaders and financial officers to not only take stock of the generational groups represented within their constituency, but also understand the payment and billing preferences for each demographic to ensure they are delivering the options their citizens seek.

Consider some of the following generational preferences that need to be accounted for when tailoring a payments strategy to each group.

Baby Boomers

In the payments space, Baby Boomers (those in their mid-fifties to mid-seventies) have been somewhat misunderstood and misrepresented. While overall less tech-savvy than younger generations, boomers are looking for convenient and efficient ways to pay their bills.

In fact, only 43% of Baby Boomers aged 52-70 have used paper checks to pay bills over the last year, while the majority (75.6%) have used the more real-time method of checking account deduction, according to the latest ACI Speedpay Pulse report. When it comes to mobile payments, baby boomers’ usage is lower, but not as much as you might think. According to The Pew Charitable Trust, this group is starting to adopt mobile payments, though some remain hesitant — not because they lack trust in technology but because they simply prefer to use cash.

When marketing to the Baby Boomer audience, it’s important to provide both traditional and digital options for payments. This group might be the highest user of more traditional methods, like paper checks, but they’re starting to make the move towards digital methods as well.

Generation X

Considering Generation X came of age during the prime years of the credit card boom, it is unsurprising that, according to Pew, they prefer paying by card. In fact, they are more likely to have credit card debt than both Millennials and Baby Boomers. When it comes to mobile payments, Gen X is slightly further along in adoption, but they still have a long way to go. While 83% of Gen X own smartphones, they’re less inclined to use mobile payments to make a purchase compared to Millennials.

To address Gen X’s split preferences, consider implementing educational programs that show them the benefits of a more digital and real-time approach to paying their bills. Give them reasons to go fully digital.

Millennials and Generation Z

The younger end of these demographic cohorts came into a world that was already buzzing with digital payment options. It’s only natural they use these methods to pay their bills. According to the ACI Speedpay Pulse report, these groups are significantly more likely than older consumers to prefer paying bills with a debit card and are more likely to cut down on paper billing statements by selecting digital options. Even more than older generations, younger consumers expect speed and seamlessness when it comes to their billing and payment experiences.

Therefore, to meet the digital demands of younger citizens, governments should keep these preferences in mind and make sure they are offering fast, seamless experiences to drive more on-time payments. Consider partnering with a bill payments provider that can bring the speed and real-time experience that Millennials and Gen Z crave.

While each generation has different preferences in how they receive and pay their bills, all are increasingly embracing digital methods. It is important to take a deep look at what each generation expects, and to evolve to meet these changing demands.

To learn more, check out the 2020 ACI Speedpay Pulse report, which dives deeper into digital differences and other current bill payment trends.

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