1. Youth are the ‘Big Players’ of
mobile payment
March 5, 2013
Mastercard says mobile is the big play
Ed McLaughlin, Chief Emerging Payments Officer at Mastercard, describes
MasterPass as his company’s “Big Play” for the next generation of payment
technology.
Worldwide purchase volume over mobile devices will exceed $1 trillion by
2017, according to IDC Financial Insights. Mobile is set to become the “next
big thing” in payments but the solutions need to be led by customers not
technology.
The current mobile payment market is fragmented between multiple providers
(the Big 4 being Paypal, Google, Mastercard and Square). Providers need to
focus less on impressing their technology on the market and more on winning
the decisive youth market.
Find the most relevant insights on youth mobile marketing: http://www.mobileYouthReport.com

2. Why focus on youth?
The youth market presents 3 untapped potentials for mobile payments.
Companies can:
1) Build on existing youth Beachhead
Young people are already using mobile payments more than others: 39% of
millennials use mobile payment services compared to 31% (Gen X) and 18%
(boomers) (source Deloitte).
2) Leverage youth influence
William Gibson, the author who first coined the term “cyberspace” once
wrote, “the future is already out there, it’s just not evenly distributed”. This
maxim holds true with technology and the youth market today. The trickle-up
of usage starting with youth is a common trait of technology adoption
(examples being Facebook, SMS and digital music). If you want to know how
adults 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 based
on 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 would
educate their parents on usage.
* Youth grow up: Loyalty to payment methods and technologies begins at a
young age. The habits formed in early teenage years transfer into adulthood.
3) Let youth absorb the risk of new product development
Internet author Clay Shirky described the wealth of excess innovation in the
internet as its “cognitive surplus”. The success of many technologies owes a
lot to the cognitive surplus of the youth market.
Before mobile operators began monetizing SMS (a technology widely
disregarded by the industry due to its limited form factor) youth were
experimenting 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 research
shows that young people discovered video chat apps like Oovoo which then
Find the most relevant insights on youth mobile marketing: http://www.mobileYouthReport.com

3. gained popularity through word of mouth. Mobile providers can leverage this
established user base without engaging in high-risk experimentation and
product launches with the higher spending adult market.
In order to tap into these potentials, companies need to adjust their approach
to research and marketing.
Research needs to go beyond the traditional approach of polling youth
preferences for technologies and start understanding the motivations behind
usage. Consumer ethnography of young smartphone owners in the US and
Western Europe will reveal pain points and need gaps. Building on these
insights, payment providers like Mastercard and PayPal can innovate with
young customers to address the “pull” of current market shortfalls.
Marketing needs to focus on building trust within the youth market. Trust is a
major stumbling block that prevents more customers from adopting mobile
payments. Trust is not something that can be bought through expensive
media buys and high-profile celebrity endorsement, it’s earned through
customer interaction at the Frontline.
Generating success in the youth market, and consequently the general
mobile payment market means a shift in company focus. Providers need to
focus on integrating and building on technology youth already have access
rather 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