JupiterResearch Finds Younger Consumers Driving Demand for Online Payment Options

May 21, 2007; 08:14 AM
JupiterResearch, a leading authority on the impact of the Internet and emerging consumer technologies on business, has found that younger consumers (those under 35 years of age) are evolving very different payment and content consumption habits from adults over 35. In a new report titled, “Payment Preferences Online: Managing the Generation Gap Between Mature and Young Adults,” JupiterResearch found that younger adults are driving much of the usage of PayPal and debit cards for online purchases, product preferences which are helping to drive the marked differences in payment habits that exist between younger adults and baby boomers.

According to the study, 48 percent of consumers ages 25 to 34 prefer debit cards for Internet transactions, as compared to only 39 percent of all online consumers. Thirty-four percent of online consumers ages 18 to 24 prefer PayPal or similar services versus 27 percent of all online consumers.

Particularly in light of the higher rates of paid online and mobile content consumption among this group, these trends may prove significant regarding how new products are developed and marketed in the future.

“As younger adults expand in proportion to the workforce, their earnings and overall capacity to purchase will also increase. This will solidify the most durable of their different payment preferences, “said Edward Kountz, Senior Analyst at JupiterResearch. “This trend will require payment-product issuers to develop marketing and product strategies to meet the payment desires and changing values of younger adults. This will include card features tailored to younger adults' lifestyle needs, and marketing efforts that embrace emerging social media.”

The deviation in online payment habits between younger and mature consumers can be directly linked to a number of social and technology trends that have emerged during the past two decades. According to the survey, the introduction of the internet, maturation of PayPal and related services, emergence of debit cards and stored value cards, and availability of data-capable mobile phones and other mobile are embraced by younger consumers as they have co-existed with technology for most of their lives.

“Beyond modifying today's most common features and products, issuers and vendors must keep an eye on the emerging data habits of younger adults, and pay special attention to how their payment and data preferences feed into tomorrow's payment-product and form-factor innovations,” said David Schatsky, President of JupiterResearch. “While a critical mass may be hard to achieve for such next-generation innovations over the short-term, leading issuers should seek to establish an early understanding of younger adults' likes and dislikes with regard to emerging payments services.”

The complete findings of this report are immediately available to JupiterResearch clients online at www.jupiterresearch.com. For details on JupiterResearch's methodology, visit www.jupiterresearch.com/bin/item.pl/methodology or email [email protected] to request a detailed methodology statement. For additional information on this report or JupiterResearch's Payments & Transactions research service, visit www.jupiterresearch.com or contact Kieran Kelly, Senior Vice President of Global Sales and Client Service, at 1-800-481-1212 or [email protected].

About JupiterResearch

JupiterResearch provides unbiased research, analysis and advice, backed by proprietary data, to help companies profit from the impact of the Internet and emerging consumer technologies on their business. The company helps online businesses make critical decisions about technology selection, spending, staffing, and Web site effectiveness; advises consumer-facing companies with online advertising, marketing, and customer service strategies to understand, attract, convert and retain customers; and guides technology vendors and service providers on market opportunity, positioning, product definition, and pricing. JupiterResearch is headquartered in New York City and has offices throughout the US and Europe. For more information, visit www.jupiterresearch.com.