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Payment Trends

Census 2022: Early payment trends for Ireland’s largest demographics

The 2022 Irish Census reveals that the population surpassed 5m people for the first time since the 1800s. This represents total growth of 8.1% over the six years since Census 2016.

Statistics also show peaks for people aged in their early 40s and pre-teen years in 2022, reflecting high birth rates in the early 1980s – Early Millennials – and 2010s – Generation Alpha.

Population by age and gender (Census, 2022)

Today, contactless transactions, social commerce and increased digital wallet usage marks the current trends in the payments landscape for all age groups across the country.  However, the early experiences with payments of both demographics referenced above will differ significantly given the decade of innovative change the payment and banking sectors has experienced and have made today’s payment realities possible.

Here’s what payment experiences both groups had/will encounter as they became/become young adults.

Early Millennial payment experiences

Cash and traveller cheques

While digital payment methods became more prevalent and would replace cash as the preferred payment option, cash and ATM withdrawals still ruled supreme as the payment option of choice for day-to-day transactions. Recent figures demonstrate how ATM withdrawals continue to slip, with withdrawals dropping by a third over the last 2 years.

No longer an evident feature in today’s world, traveller cheques were safe and convenient means of payment for anyone travelling abroad. However, their use and the use of cheques in general would decline significantly with the rise of digital payment options over the coming decades with their usage continuing to bounce into touch.

Debit and Credit Cards

Swiped through or inserted into card terminals, credit and debit cards were not an invention of the late 90’s or 00’s. The credit card for example, the flexible friend of the late 70’s, is closing in on its 70th birthday but the launch of the now-defunct Laser card by Irish banks in 1996 furthered card payments progression as a mainstream transaction type. Credit and debit cards experience accelerated growth as a payment preference throughout the Celtic Tiger years.

Online Banking

For larger or business transactions, Irish Millennials would have been the first generation to experience online banking with applications like Banking 365. People began to use online banking services to initiate an electronic transfer of funds between accounts. Commonplace in today’s world with most banks now having their own app, this was revolutionary in the late 90’s.

The advent of online shopping

E-commerce’s growth in popularity, combined with the advanced uses of smartphone devices in the late 00’s, led to more people using online payment methods to make purchases. Far from the streamlined and innovative experiences we have today, technical issues as well as concerns over security and fraud hampered initial user experience and functionality.

Generation Alpha payment experiences

Peer 2 Peer Payments

P2P Payments, where individuals allows individuals send money easily and directly to family and friends.

This appetite for seamless payments is only going to grow. Current legislative proposals on instant payments in the EU is currently moving to make it a very near reality. Generation alpha, unlike previous generations, will likely be unaware of next day or delayed money transfers to their current accounts.

Payments going fully mobile

We’re already seeing the physical card disappear more out of sight as people opt to pay with their phone or wearable device. Given the increasing popularity of smartphones and the widespread adoption of mobile payment systems, people born just over a decade ago will fully embrace mobile platforms to make transactions as a generational norm. With much current debate revolving around whether cards will replace cash, it is possible that both payment forms are in steep decline in favour of digital wallets and mobile payments.

Payments in a Virtual World

The increased familiarity we’re currently seeing with social commerce and online live shopping experiences, along with that rise in mCommerce usage, points to increased payment experiences in the Virtual Reality (VR) sphere over the coming years. Apple’s recent launch of its own AR headset highlights this. Unlike the Metaverse, there are already tangible use cases for payments through every day use of VR, such as furniture and home design stores allowing customers to see how products will look in their home through their smartphone.

Shopping in virtual stores will enhance online shopping experiences with virtual product displays enabling more informed consumer interaction. It also allows product and social interactions when visiting a physical store may not be possible. Some retailers already enable online shoppers to “try on” items to see how they look through VR platforms.

Digital Identity and biometric payments

Payments are becoming increasingly digital and mobile. Government institutions and the banking and finance sectors continue to keep pace to ensure payments are securely validated. Digital ID’s will be part of payment experiences. Customer storing relevant information in a digital wallet to verify payments more easily through their device or card. We are already accustomed to biometric authentication methods, such as fingerprint scanning, facial recognition, or iris scanning as an alternative to using a passcode to access our smartphones. With biometrics providing secure and convenient methods of verifying one’s identity, Generation Alpha may be part of the first wave of digital natives used to linking their biometric data to their payment accounts, allowing them to make transactions securely by using their unique physical characteristics.

Different initial payment trends for Ireland’s largest demographics

Despite a relatively short gap between demographics, both will encounter initial payment experiences from almost unrecognisable realities. Millennials will remember a time where Ireland operated with two currencies as the Euro started to replace the Irish Pound. Generation Alpha will likely use cash very rarely, with physical cards even becoming less visible in favour of mobile payments.

The former has adapted to a world of increased digital payment usage over the last 10 years. The latter will experience payments as digital natives, with pocket money even being sent digitally to them by their parents.

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