Transcript of "(mobileYouth) Download - Youth are the ‘Big Players’ of mobile payment"
Youth are the ‘Big Players’ ofmobile paymentMarch 5, 2013Mastercard says mobile is the big playEd McLaughlin, Chief Emerging Payments Ofﬁcer at Mastercard, describesMasterPass as his company’s “Big Play” for the next generation of paymenttechnology.Worldwide purchase volume over mobile devices will exceed $1 trillion by2017, according to IDC Financial Insights. Mobile is set to become the “nextbig thing” in payments but the solutions need to be led by customers nottechnology.The current mobile payment market is fragmented between multiple providers(the Big 4 being Paypal, Google, Mastercard and Square). Providers need tofocus less on impressing their technology on the market and more on winningthe decisive youth market. Find the most relevant insights on youth mobile marketing: http://www.mobileYouthReport.com
Why focus on youth?The youth market presents 3 untapped potentials for mobile payments.Companies can:1) Build on existing youth BeachheadYoung people are already using mobile payments more than others: 39% ofmillennials use mobile payment services compared to 31% (Gen X) and 18%(boomers) (source Deloitte).2) Leverage youth inﬂuenceWilliam Gibson, the author who ﬁrst coined the term “cyberspace” oncewrote, “the future is already out there, it’s just not evenly distributed”. Thismaxim holds true with technology and the youth market today. The trickle-upof usage starting with youth is a common trait of technology adoption(examples being Facebook, SMS and digital music). If you want to know howadults will be paying for goods tomorrow, look at what youth are doing today.Youth inﬂuence in mobile payments is a 3 way process* Youth inﬂuence each other: 65% of youth bought or used technology basedon what their peers, not what ad agencies or brands said.* Youth inﬂuence adults: youth were key to the wider adoption of SMS,Facebook and BBM within the adult market. Often older children wouldeducate their parents on usage.* Youth grow up: Loyalty to payment methods and technologies begins at ayoung age. The habits formed in early teenage years transfer into adulthood.3) Let youth absorb the risk of new product developmentInternet author Clay Shirky described the wealth of excess innovation in theinternet as its “cognitive surplus”. The success of many technologies owes alot to the cognitive surplus of the youth market.Before mobile operators began monetizing SMS (a technology widelydisregarded by the industry due to its limited form factor) youth wereexperimenting and adapting the format. From these early usage scenarios,the industry was able to develop effective charging models.More recently, youth have led the mobile video chat trend. Our researchshows that young people discovered video chat apps like Oovoo which then Find the most relevant insights on youth mobile marketing: http://www.mobileYouthReport.com
gained popularity through word of mouth. Mobile providers can leverage thisestablished user base without engaging in high-risk experimentation andproduct launches with the higher spending adult market.In order to tap into these potentials, companies need to adjust their approachto research and marketing.Research needs to go beyond the traditional approach of polling youthpreferences for technologies and start understanding the motivations behindusage. Consumer ethnography of young smartphone owners in the US andWestern Europe will reveal pain points and need gaps. Building on theseinsights, payment providers like Mastercard and PayPal can innovate withyoung customers to address the “pull” of current market shortfalls.Marketing needs to focus on building trust within the youth market. Trust is amajor stumbling block that prevents more customers from adopting mobilepayments. Trust is not something that can be bought through expensivemedia buys and high-proﬁle celebrity endorsement, it’s earned throughcustomer interaction at the Frontline. Generating success in the youth market, and consequently the generalmobile payment market means a shift in company focus. Providers need tofocus on integrating and building on technology youth already have accessrather than providing new solutions they have to learn from scratch.Find out more:The 2013 mobileYouth Report Find the most relevant insights on youth mobile marketing: http://www.mobileYouthReport.com