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Amazon Payment Services has published a white paper that compares the spending preferences of Generation Z (born 1997-2012) with that of other generations, such as Millennials (born 1981-1996), and discusses the influence of Gen Z as its spending power grows.
The white paper entitled “Understanding Generation Z” is based on research conducted by Sixth Factor Consulting, and sponsored by Amazon Payment Services, which surveyed over 1,800 respondents across the UAE, KSA, and Egypt.
“The Gen Z demographic has immense potential to drive future business growth for merchants, making it an important customer segment for businesses to secure,” said Peter George, Managing Director for Amazon Payment Services in the Middle East and North Africa (MENA). “The analysis in this paper presents Gen Z’s attitudes toward digital payments covering also other relevant industry topics in MENA, can be used by merchants to connect effectively with this audience, in order to drive healthy, and sustainable growth.”
Peter George, Managing Director, Amazon Payment Services MENA. Source: Amazon Payment Services
Here are the top findings from the “Understanding Generation Z” white paper sponsored by Amazon Payment Services:
More than half of research respondents prefer paying digitally
Research showed Ten Z members prefer digital payment methods, with payment cards and mobile wallets being the most popular.
Those surveyed said they thought Buy Now, Pay Later (BNPL) options are a convenient way to pay for big-ticket items. Zero interest, lack of paperwork, and lightening the pressure on the pocket are the reasons driving interest for this payment method among Generation Z.
In all three countries, the vast majority of respondents were aware of peer-to-peer (P2P) transfer apps, with awareness as high as 92% in Egypt, driven by the early availability of the national instant payment network. The majority of respondents across UAE, KSA and Egypt claim to have conducted a P2P transfer using an app or another method at least once.
The research also found high awareness of in-app payments; however, respondents suggested that this method is competing with other commonly used payments methods, and that merchants should consider using discounts to steer more purchases toward mobile apps.
One category of in-app payment that was welcomed by respondents was super apps which are observed as particularly convenient, leading to high awareness and take-up.
Personalization over privacy
Gen Z members say they prioritize personalization over privacy. The study found that Gen Z is less concerned about data-sharing than previous generations, and they are willing to share their data if it provides them with a better shopping experience.
Underlying motivations driving behavior
To successfully reach Gen Z, businesses must understand not only their quantifiable behaviors but more importantly their underlying motivations.
As the first generation of digital natives, Gen Z have never known a world without smartphones and the internet, unlike the digital immigrants who preceded them.
This has exposed Gen Z to various global issues very early in life due to their behavior as heavy users of social media, embedding a deep sense of social responsibility which shows up in their choice of brands and workplaces. To gain favor with Gen Z, businesses must understand their values and priorities and develop a matching corporate social responsibility strategy.
Gen Z is also one of the most entrepreneurial generations, especially in the Middle East. This entrepreneurial mindset is motivated by the underlying desire for financial independence.
As a result, offering loyalty programs and reward schemes that emphasize affordability, and showcasing financial planning as an attractor to newer payment methods will be beneficial for businesses targeting Gen Z.
Related: Five Things You Need To Know About Leading Generation Z
This article is from Entrepreneur.com
