​Starbucks near a high school in Bethesda: every day at lunch time for five business days running, the high school crowd storms the store for their lunchbreak, 90% of them girls. Half of the crowd goes straight to picking up their orders, having ordered and paid ahead. Less than 5% of the remaining kids pay cash, while the others use a mix of mobile payment apps and loyalty cards, as a senior influencer recently observed on LinkedIn.

Shift to the Nordics and the grandparent generation: despite the region being among the most digitised in Europe, a third of the population aged 65 and above do not own a smartphone, and the other two thirds are unconcerned about smartphone brands - in stark contrast to Nordic millennials who practically all own a smartphone and have a strong preference for market-leading brands.

And while the young population base their choice of apps on recommendations by friends and family and are greatly driven by the need to stay connected, seniors tend to make up their own mind and rarely let advice from friends and family, or ratings for that matter, affect what they download. Basically, they want easy access to services and tasks, and staying connected is not a concern. Nor are functions that allow you to split the bill, be awarded loyalty points or store your receipts digitally.

Old habits die hard

The senior Nordic population is conservative in terms of payment methods and tend to stick to what they know. Unlike their grandchildren, they prefer traditional payment methods for small ticket items in newsstands or coffee shops, with a predilection for debit card and cash payments. By comparison, millennials are least likely to use cash and are very open to using payment apps in the future.

For their weekly shop, all age groups expect payment apps to play a bigger role in the future. As of now, seniors prefer to pay with their debit card, are more prone to using a credit card than young people, and, surprisingly, expect to spend more cash in the future. Generally speaking, seniors have little faith in payment apps and are laggers in terms of adoption.

Add to this the exponential uptake of the contactless debit card Dankort, which, with 43% of all in-store transactions by end of 2017 being contactless, has made Denmark one of the countries in the world with the highest penetration of contactless payments. In fact, while he expects the share of payments on mobile devices to increase, Jeppe Juul-Andersen, SVP and Head of Domestic Card Scheme Services, Nets, expects the success of contactless payments to potentially reduce the pace of this conversion.

This is supported by seniors' response when asked why they do not use their smartphone for mobile payments. They express a general fear of losing their device, and, like millennials, they fear being defrauded which in their eyes makes card payments a safer option:

"With new technologies, we see a clear move towards fewer payment cards and the possibility of having all information in one place, such as on your smartphone. In the long term, you may not even have to bring anything but yourself to pay," says Jeppe Juul-Andersen with a reference to biometric solutions such as finger vein scans or face recognition. But it will be a while yet:

"Whether we're looking at a five, eight or ten-year horizon, the physical card will still exist. But there will be more and more of us not carrying it at all times," he concludes.

Mobile commerce on the rise in the Nordics

According to research by LoyaltyOne and Response Analyse on behalf of Nets, millennials want a more hands-on and unique shopping experience where loyalty points for a session with a chef or nutritionist, for instance, could lead to more engagement, loyalty and, ultimately, repeat spending.

Seniors too want a tactile shopping experience. But unlike the rising generation, they tend to gravitate toward brick-and-mortar stores and have a clear preference for human interaction when it comes to customer service, whereas millennials demand chat and self-service. Seniors show little interest in mobile commerce or in-app payments, and 69% of senior respondents found the question irrelevant when asked which payment methods they preferred today for mobile commerce and in-app:

"The numbers clearly show that the senior population prefers hands-on shopping over mobile commerce. But when we asked them to imagine themselves shopping on their mobile device in the future and perhaps even paying in-app, more than half responded positively, which indicated they expect mobile commerce and in-app payments to play a more prominent role in years to come," explains Simon Buchwaldt-Nissen, Director, Corporate Strategy at Nets.

Seniors prefer in-store shopping, yet 29% of Danes aged 66-74 had given mobile shopping a try in 2017, compared to just 7% in 2012.

He is backed by a recent report by DIBS on e-commerce in the Nordics which shows a significant move towards shopping on the mobile or tablet. In 2017, 51% of respondents in Denmark had done their shopping on the smartphone over the past three months, significantly up from merely 19% of Danes in 2012, which corresponds to a 143% increase. In both Sweden and Norway, 54% of respondents had purchased using a smartphone or tablet in the past three months, compared to only 16% and 20% in 2012 respectively. For Sweden, this corresponds to a 238% increase, while it is 170% for Norway.

App fatigue more widespread among younger people

Acceptance and security remain a concern for all age groups, and they all demonstrate a healthy skepticism towards technology that can access information on their whereabouts and digital behavior. Digital born and tech-savvy, millennials are reluctant to share personal data with others, even if they trust the company behind the app, and the seniors are right behind them with more than half worrying about payment security. They feel safer using their card and are likely to be late adopters of payment apps.

The younger generations have little patience and are prone to delete an app if it bores them or takes up too much storage. Less so the senior generation who, once they have downloaded an app, tend to keep it:

"Seniors are less likely to keep their ear to the grounds, digitally speaking, which makes them an easy prey.  They download what they want, and tend not to delete apps they no longer use, which on the one hand makes them come across as more patient than the younger generations, but perhaps also a little less dynamic, or even more vulnerable," says Shehzad Ahmad, Head of Information Security, Denmark at Nets.

He recommends that seniors check their phone regularly and make sure to update apps or delete them if no longer in use. In his view, millennials have home advantage, wary as they are of subscription traps and the like:

"The result of the survey is a wake-up call for seniors, and we need to make sure that not only our kids but also the generation born in an analogue era are able to fare safely in a digital world," concludes Shehzad Ahmad.

Sources
In 2016, Nets contracted with Response Analyse to perform a quantitative survey with a total of 5,700 respondents across Denmark, Norway, Sweden and Finland. The findings were covered in the story: ‘Millennials want one app for everything’. For this story, we zoomed in on the control group of the survey, i.e. 1220 seniors above 65 years of age, to learn more about their demands and behavior when it comes to payment apps.

Other sources:
DIBS’ report on Nordic e-commerce: https://www.dibs.dk/node/1149
Pascal Bouvier, CFA, Venture Partner at Santander InnoVentures, on LinkedIN
http://www.ihrmagazine.com/millennials-want-a-tactile-shopping-experience-according-to-new-research/