Millennials (born 1981–1996) and Gen X (born 1965–1980) are driving the adoption of alternative payments, such as digital and/or smart device payments, as well as virtual cards.
This is according to First National Bank’s (FNB’s) analysis of alternative payment adoption trends among its customers.
A virtual card is a randomly-generated card number linked to a payment account.
FNB reveals Millennials make up 64% of virtual card users and 57% of all digital payments. It adds that Gen X follows, with 32% and 28% for virtual cards and all digital payments, respectively.
Gen Z, those born between 1997 and 2012, are the third-highest users of digital payments at 12%, but they lag Baby Boomers (born between 1946 and 1964) in the adoption of virtual cards.
According to the bank, Baby Boomers make up 3% of digital payments and virtual card users, while Gen Z accounts for 1% of virtual card users.
It notes that adoption among Gen Z is expected to increase rapidly over the next few years due to their renowned appetite for new technology.
A recent study from Juniper Research found the number of virtual card transactions will exceed 121 billion globally by 2027; increasing from 28 billion in 2022.
According to the market analyst firm, this represents growth of 340%. It predicts the rising integration of virtual cards to existing digital wallet services, such as Apple Pay and Google Pay, will drive this growth by exploiting existing substantial user bases of these digital wallets.
FNB Retail CEO Raj Makanjee says: “We are pleased to see customers of all ages using more convenient and safer ways to pay, as this bodes well for accelerated adoption among individuals and families.
“The adoption trends among our customers are consistent with our efforts to provide a wide range of alternative payment options, while ‘democratising’ access to affordable smart devices and data through FNB Connect.”
According to FNB Card CEO Chris Labuschagne, customers have activated over three million virtual cards, with over R6.6 billion in spend, since the launch of the payment solution last year.
“Our virtual card is available to individual customers on debit, fusion and credit cards, as well as business debit cards. It has a dynamic CVV (three-digit security number) that changes regularly to minimise the risk of fraud. Customers can use the virtual card for online shopping, streaming services, subscription payments and QR payments via ‘Scan to Pay’ on the FNB app,” he says.
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