As a small business owner or software developer looking to create Financial Technology (Fintech) SaaS applications and services, you may be wondering how you can best help young adults manage their money and make informed financial decisions. After all, managing one’s finances is an integral part of life that all individuals need to learn in order to truly succeed financially.
So if you’re looking for insight into the needs of this sector of users as well as tips on what features your Fintech app should include – then read on! This article will discuss key insights fintech developers and business owners should know about these young adults and their bill payment habits and stressors, and provide recommendations on how to work with them.
The Newest Paying Audience
Young adults aged 18-29 are the newest consumers experiencing paying bills and dealing with fintech companies for the first time. Because this group represents the future of consumers, we must understand their stresses and pain points.
According to research by PayNearMe, over one-third of young adults “agree” or “strongly agree” that they “feel disorganized when trying to manage and pay their bills.” Specifically, over 50% of young adults have trouble remembering their login information, passwords, account information, and keeping track of due dates.
Because of these pain points, it’s no surprise that young adults have had the highest rate of late payments compared to any other group over the past 12 months. Specifically, 55% of young adults in the survey had made a late payment at least once in the past year. Not only does this cause stress, but it can result in added fees and even lower credit scores if not taken care of properly.
It may seem like autopay is the easiest solution to these young adults’ problems; however, that’s not necessarily the case. Because this age group typically has lower incomes than their counterparts, they want control of when the payment is made because they worry about and want to avoid overdraft fees.
For example, if a 21-year-old is living paycheck to paycheck without a cash cushion in the bank, they are less likely to set up autopay for fear of over-withdrawing their bank account and getting hit with an overdraft fee.
Improving the Bill Pay Experience for Young Adults
Now that you know the pain points for young adults, here’s how you can address them to drive customer loyalty and improve customer satisfaction.
Bill Payment Reminders
According to PayNearMe’s research, 46% of young adults wanted text messages and emails alerting them when their bill was due. This can help them remember and manage their due dates better while simultaneously having control of their finances and avoiding overdraft fees.
Specifically, as a SaaS developer, it’s important to ensure your platform allows the user to add and customize bill payment reminder notifications like texts, email messages, and push notifications. To deal with young adults’ pain points, you can also work to include individualized links within the reminder messages so young adults’ bills can be paid without them needing to log in or remember their account numbers.
Another feature that would be good to add is the ability for your business partner to customize the text that goes with the payment reminder. Because this is an important message that will be automatically sent to their customers, it can help them drive brand awareness and even customer loyalty.
New Bill Payment Options
According to PayNearMe’s research, 45% of young adult respondents wanted the ability to store and pay their bills in their digital wallets. This is not surprising since many young adults have never written a check, and many do not use credit cards.
Image courtesy https://www.techtarget.com/whatis/definition/digital-wallet
Although not traditional, in PayNearMe’s research, young consumers showed significant interest in using payment apps like PayPal, Venmo, and Cash App to make bill payments. Thus, SaaS developers need to consider adding these forms of payment to their platform to address the payment preferences of young adults.
Covid-19 led to a sharp increase in mobile payments and online transactions. People of all ages were looking for contactless transactions when they went to stores and were shopping more online to avoid contact with other people.
As a result, mobile payments reached $1.7 billion in 2021, according to Business of Apps, which represented a 27% annual increase. Furthermore, since young adults are generally more familiar with using mobile payments, it’s worth checking to see if it’s a preferred form of payment for this audience.
PayNearMe’s research was done across a randomly selected group in 2021. While their data may correlate to your customer, it’s important to start by fully understanding your target market and their specific pain points.
Therefore, a good next step would be to explore the preferences of your target market by doing a survey of your customers and asking them what they’re interested in and their specific pain points and preferences around payments.
The Bottom Line
Payments can be a major stressor for young adults, and many current payment options cause a lot of friction for users because they are used to technology working quickly and seamlessly, and they are not familiar with traditional forms of payments like writing checks or maintaining a checkbook balance.
By keeping these things in mind and creating payment options specifically designed for young adults, you will be able to create a great customer payments experience that can help drive retention and brand loyalty for the newest generation of responsible bill payers.