Your clients have likely done thorough analytics research to develop a persona of their ideal customer. Perhaps their preferred customer skews male or female, is young or old, or part of a particular demographic that can be defined by household income, level of education, employment status or other indicator. In most companies, “knowing” the customer probably guides many of the business’s decisions, like the products and services they sell, the hours they stay open, the methods they use to market your business, and the places where they choose to advertise.
One factor many businesses may not have considered is how the payment options they offer - or don’t offer - may be affecting their sales and their relationship with their customers.
Payment options can be the difference between making a sale and not making a sale. Consider a simple example: a so-called “travel hacker” - that is, a consumer who aims to accumulate points or miles as a means of earning travel rewards (free airline tickets, hotel rooms, rental cars, etc.) - might want to pay for everything they buy using a particular credit card. If a business doesn’t accept credit cards - specifically, the consumer’s credit card of choice - they will more than likely take their business to a company that will.
Payment options can also incentivize consumers to support a business at the expense of its competitors. For example, with the recent rise in the use of contactless payments, many consumers may favor businesses that support payment methods like text to pay, or their digital wallet of choice, such as Apple Pay®, Google PayTM, or Samsung Pay®.
While these are only a few of many examples, the important takeaways are:
- Demographics impact and can predict payment preferences.
- By tailoring available payment options to the preferences and needs of clients’ customers, ISVs can help clients increase revenue and encourage customer loyalty.
"The Effect of Demographics on Payment Behavior"
One way to begin to think about how different demographics prefer different payment options is to review the research surrounding consumer behavior. For example, the paper The Effect of Demographics on Payment Behavior, from the the Federal Reserve Bank of Boston, yields broad-based insights on what one can expect in terms of usage & adoption patterns and payment-instrument preferences, with income, age, education, and race all “significant in explaining payment behavior.”
Meanwhile, gender, employment status, marital status and even geographic area are also significant indicators, with the paper noting how “women use significantly less cash than men” while using “more checks, debit cards, online banking bill pay, and bank account number pay.” In addition, “women are more likely to hold prepaid cards, which include gift cards.”
At the same time, valuable insights can also be uncovered via survey data. A recent survey revealed, for example, that preferred method of payment can readily be predicted by income, with credit cards the preferred payment option among consumers with an annual income of $75,000 or more.
Survey data has also shown that age is a good predictor of whether a consumer is familiar with and likely to appreciate cutting-edge payment options. According to a survey commissioned by NerdWallet, “Millennials (ages 24-39) are the generation most likely to use mobile payment apps - 94% use them, compared to 87% of Gen Zers (ages 18-23), 88% of Gen Xers (ages 40-55) and 65% of baby boomers (ages 56-74).”
Payments: More Than Mere Transactions
Integrating payments is one way to increase the value proposition of the software you offer. Merchants want to give their customers the chance to pay the way they want to pay - quickly, conveniently, and securely. That’s why it’s always a good idea to provide multiple payment options. The more fast, secure payment options you are able to offer within your software solution, the more likely it is that your software will accept any given customer’s preferred payment method. This is obviously a large factor in regards to customer satisfaction. It’s even better if you can provide a uniform payment experience. Whether purchasing in-store, online, or via mobile, virtually everyone appreciates consistency across channels, which has become a point of emphasis for businesses with the resources to pursue an omnichannel strategy.
It’s also worth remembering that most consumers have strong preferences in terms of how they want merchants to communicate with them, whether it’s via email, text, snail mail, phone call, voice mail, mobile alert or social media. For instance, when it comes to communicating special offers and marketing messages, Hubspot found that younger consumers prefer social media and video content, while older consumers tend to prefer email. This is another example of how customer demographics can help a business.
Customer Demographics within Payment Software
So where does a merchant access these invaluable customer demographics? That’s where ISVs come in - including demographic features and multiple payment methods within an ISV’s software solution will increase the solution’s value to customers.
Global Payments Integrated can help. Within our Customer Engagement Suite, we offer Analytics and Reputation Management, a web-based application that delivers intelligent data to provide deep visibility into:
- Social reputation
- Customer demographics
- Marketing reach
- Competitors
Analytics and Reputation Management helps businesses to:
- Engage customers
- Drive return visits
- Manage online reviews and reputation
Conclusion
By offering the demographics provided in the Analytics and Reputation Management product, as well as a variety of payment methods within your software solution, you can become a “one-stop shop” for your customers. Contact us today to learn more.
Apple Pay® is a trademark of Apple, Inc. All trademarks contained herein are the sole and exclusive property of their respective owners.
Google PayTM is a trademark of Google, Inc. All trademarks contained herein are the sole and exclusive property of their respective owners. Any such use of those marks without the express written permission of their owner is prohibited.
Samsung Pay® is a registered trademark of Samsung Electronics Co., Ltd.