It’s only been ten years since my then 10-year-old daughter yearned for a Blackberry with which she could IM her luckier friends — especially those she met on Minecraft. Today, she still is in contact with some of those Minecraft friends, a couple of whom she’s met in real life. Over time we have integrated our "real" lives more thoroughly with the lives we live online, both socially and in terms of our commercial interactions. The boundaries between digital ties and in-person connections continue to become more fluid. Millennials and Generation Z (or Zoomers) will make up 70% of the global population in the next ten years. A Zennial — depending on your source — is either a collective term for a member from either group or a description of an individual belonging to a microgeneration on the cusp of both cohorts. For our purposes today we’ll be using the former definition. Millennials, Zoomers, and Zennials tend to be comfortable interacting on or offline. Zoomers, arguably, are more comfortable online.
No matter how we categorize this contingent of customers, suppliers, and leaders — By 2030, this is the group that will drive consumer needs and the group that will decide how to meet those needs. Whatever financial instruments are used to satisfy this cohort’s needs, those instruments must perform efficiently, smoothly and adapt seamlessly.
Because these groups grew up with computers and cellphones in their hands, they expect technology to support their everyday needs. According to WEX GM Matt Roy, “We anticipate the next decade will consolidate the mobile payments market. We offer solutions for businesses — large and small — to embed the technologies into their business models. Flume helps SMBs tackle their financial processes and integrate financial technology from accounts payable and receivable to their APIs and payment models.”
But given that the oldest Millennials are in their 40s and the oldest Zoomers are young adults— these groups aren’t just an abstract idea — they are composed of the consumers and the business leaders already defining this moment. It’s likely you, reading this now, are of one or the other group. How we read those coming challenges and opportunities together will be essential to how we address the markets in the future.
As consumers digital payments expectations have shifted
All over the world, digital payments have become the way of paying for what we need – our reliance on these methods was hastened by the global pandemic. According to a recent study by Acumen Research and Consulting, the global P2P payment market value was $1.8 Trillion in 2021 and is expected to grow to over $9T in 2030. Asia Pacific is leading the market with 34% of the world market share. The payments products that are being used include things like personal digital wallets, an app for paying a friend who bought your dinner the night before, and contactless payments technology used to pay for your bag of herbs at the farmers’ market. These tools are increasingly being backed by institutions other than traditional banks.
These payment options in eastern and southern Asia are integrated with social networks, like WeChat in China. In the P2P payment arena, global uptake varies enormously. In emerging markets, mobile-based applications took off more quickly because of the general lack of connectivity and hardware. Mobile networks were cheaper and quicker to get up and running, and the population went straight to smartphones without ever having flip phones or desktop computers. As developing countries have swiftly adopted digital payments, more economically advanced countries have lagged behind. Fee structures for bank transfers in the UK (where they are instant and free) and Europe mean that P2P payments are slow to catch on. Still, this will change as Zennials become more fluid in where and how they work and socialize.
Consumers also expect more options in their payments, and Buy Now Pay Later (BNPL) is a way to offer flexibility. WEX worked with Uplift to provide all the support needed to give customers BNPL plans that worked for them while connecting with the suppliers and loan providers robustly and securely with WEX’s enterprise-grade virtual card program.
While the concept of BNPL is over a century old, there has been a resurgence in the last five years which has seen the usage more than triple, according to Forrester Research. BNPL provides a means for consumers to buy more expensive items or more items from a vendor. The regulatory environment will, no doubt, change to reflect this upsurge. The players in the field that can most quickly tap into and adapt to a changing environment will be the global winners.
Seeking meaning and autonomy in our working lives driven by a new generation
Currently, millennials are between 25 and 40 years old, and make up the most significant portion of the workforce in the US. So a generation of tech-savvy people is also deciding how to implement these technologies into their jobs and businesses. Millennials make up most business owners. Zoomers, while younger, are truly digital natives and are much more adept at leveraging their networks to support their new business ideas.
As business leaders, millennials look for work with meaning, as do their direct reports - Zoomers. Work isn’t only about getting a product or service to market, but having a company culture with a meaningful work environment. According to a recent Harvard Business Review article, transparency, trust, and autonomy are becoming vital parts of a modern working environment. Although all of these attributes have been discussed for years, their adoption was made necessary by the global pandemic, as workers’ desired work location and kind of work became a more acceptable conversation topic in many industries. What Zennials need as individuals will also drive how these business leaders deploy systems that make working autonomously more straightforward.
Further, the work-life balance has become a more genuine goal in the last few years. Yes, we need work, and we want to get some satisfaction from that. But whether we have a traditional family or want to spend time clearing our heads and doing other things, how much time we are dedicating to our jobs has become a serious consideration for many.
Expediting commercial exchanges through new technologies
In the next ten years, providing the means for seamless, scalable, and international financial settlement will become more crucial in making these new businesses run smoothly. Whether you are running a vintage market in London, catering to a Sri Lankan customer using a social app for payment, or managing the local coffee shop, the way we pay will be digital. But where those funds come from and how they are settled will be fine-tuned in the coming decade – the systems chosen now should be nimble and anticipate the changes ahead.
As business leaders, Zoomers and Millennials will also drive the integration of payment options - whether it is integrating a company’s Application Programming Interface (API) or streamlining Accounts Payable (AP) and Accounts Receivable (AR).
The four-party payment model traditionally has described the process of connecting a consumer and their bank with the merchant and the merchant’s bank. Some models include other players – retailers acting as banks and social networks operating as customer wallets. The WEX payment Gateway allows online businesses to accept card payments, just like a POS terminal in a physical store. We have helped companies of all sizes to limit their risk, increase productivity, and reduce costs. All of WEX’s offers are focused on supporting businesses in their need to run smoothly and flexibly for their customers.
FLUME strengthens the backbone of small businesses
“FLUME was built for small businesses, who are the backbone of our country,” says Krystal Carriere, product manager at FLUME. “We wanted to build something for them specifically.” Many of these businesses have one person doing all administration duties, including AR and AP. A quick-to-install and integrate product that frees up time and improves a company’s reputation is a boon for these businesses. As one of our customers puts it, “The folks developing FLUME have been awesome. I have never worked with a company that has been this focused on making a product as useful and functional as it can be,” says Emilee Bolduc, Office Manager for Preservation Timber Framing.
For WEX, collaboration with its customers is integral to how it likes to do business. So whether it is an app like FLUME or a bespoke system, WEX wants its solutions to work for the people with whom the company works.
2030 is very nearly here - how will digital payments transform between now and then
WEX’s FLUME is the latest tool in a portfolio that is functional and efficient in the scheme of the current payments landscape. WEX can see that landscape changing, and its portfolio of payment options will continue to evolve. In a future less than a decade away, the core of WEX’s customer base will be Millenials and Zoomers. WEX will work towards a more team-focused and balanced work-life — passing the baton, not the buck (as a Boomer might put it). Creating transparent and uncomplicated offers that can smooth over complexities with complete attention to detail is what customers, suppliers, and consumers will need. Creating smooth financial processes is what WEX does, and collaboration is at the core of WEX’s operations, in 2030, and beyond.
Learn more about how WEX payment solutions can be tailored to your business, so you can accelerate and streamline operations while creating lasting growth and success for your organization.
Acumen Research and Consulting
Harvard Business Review