Millennial digital payment trends and opportunities

Across credit, debit and prepaid, in United Arab Emirates and Saudi Arabia

Across the Gulf Cooperation Council (GCC) countries, including Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman, the millennial generation–defined as those born between 1980 and 2000, or 18 to 34 years old–is large, influential and increasingly affluent1. For GCC banks and merchants, there is a real opportunity to identify needs and preferences of millennials and tailor the value proposition for this influential segment. Issuers need to:

  • Establish a digital presence
  • Move from a product-centric to a customer-centric approach, with a personalized experience
  • Ensure multichannel integration and a seamless user experience
  • Ensure relevant communications for the target audience

Visa Performance Solutions conducted extensive research with millennials in the United Arab Emirates and the Kingdom of Saudi Arabia in order to bring these insights to banks and merchants2. Findings:

  • Millennials in UAE and KSA make up at least a quarter of the country’s population
  • UAE millennials will generate on average $40,000 and KSA an average of $18,000 in annual gross income by 20194
  • They spend more than their global peers, based on per trip travel spend
  • They are driving the surge in e-commerce spending (which increased by 25 percent in 2015 based on VisaNet data)

The chart below shows the percent of millennials who shop online. In addition, it shows the device used for shopping and the average spend when they shop (based on the last spend).

Top Shopping Categories for Millennials in UAE and KSA2

chart showing G C C millenials shopping categories and devices

When assessing the preferred payment types for online shopping, credit was a clear preference for UAE, while prepaid was the preference among KSA millennials. Millennials are also attracted by the type of reward programs and offers that credit cards can support. Sharia-compliant cards are becoming increasingly popular, especially amongolder, indigenous millennials.

It’s imperative that issuers and merchants revamp their business model to meet the needs of millennials. Visa Performance Solutions can help issuers and merchants develop profitable products and services that will appeal to this consumer segment.

Preferred online payment method by millennials for e-commerce in KSA and UAE2

chart showing millennials preferred payment methods

Digital experience behaviors and needs

GCC millennials tend to be curious, sociable, tech-savvy population whose use of technology is deeply embedded in their everyday lives. Millennials in GCC, especially UAE and KSA are affluent and spend a lot of time on digital devices. They spend a lot of time of social media sites, and e-commerce and bill payments are the top two payment-related activities.

The majority of GCC millennials (70 percent) are drawn to online channels to save time, 60 percent online for convenience, and 40 percent  buy goods and services online because they aren’t available locally.

Millennials typically desire speed and convenience, and they tend to be frustrated by the online user experience offered by many GCC banks and merchants. They are dissatisfied withexisting loyalty programs and are looking for relevant, engaging rewards as well as

  • A frictionless payments process
  • Intuitive navigation
  • Experiences that work well on mobile devices 

 

User experience satisfaction among GCC millennials

It’s clear that satisfaction is driven by the quality of the online shopping experience2. 

chart showing gcc millennials shopping experience satisfaction

To find out more, please download the full report which outlines in greater detail what these trends mean for payment behavior, and what opportunities this may present to forward-looking issuers and merchants.

Download white paper

Sources

1The Deloitte Millennial Survey, 2014.

2Millward Brown in-depth market research program commissioned by Visa Performance Solutions, 2015 including both qualitative and quantitative questionnaires. Research involved a statistically representative sample of 1,023 Millennials (18-34 year old) and Non-Millennials (34+ year old) across KSA and UAE. See white paper for more details. 

3How to Tap Into the Purchasing Power of Millennials with Social Media. August 2015

4Euromonitor International Report, 2014.

 

Disclaimer

The information, recommendations or “best practices” contained herein are provided “AS IS” and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. When implementing any strategy or practice, you should consult with your legal counsel to determine what laws and regulations may apply to your specific circumstances and what decision to make. The actual costs, savings and benefits of any recommendations, programs or“best practices”may vary based upon your specific business needs and program requirements. By their nature, recommendations are not a guarantees of future performance or results and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Assumptions were made by us in light of our experience and our perceptions of historical trends, current conditions and expected future developments and other factors that we believe are appropriate under the circumstance. Recommendations are subject to risks and uncertainties, which may cause actual and future results and trends to differ materially from the assumptions or recommendations. Visa is not responsible for your use of the information contained herein (including errors, omissions, inaccuracy or non-timeliness of any kind) or any assumptions or conclusions you might draw from its use. Visa makes no warranty, express or implied, and explicitly disclaims the warranties of merchantability and fitness for a particular purpose, any warranty of non-infringement of any third party’s intellectual property rights, any warranty that the information will meet the requirements of a client, or any warranty that the information is updated and will be error-free. Visa shall not be liable to a client or any third party for any damages under any theory of law, including, without limitation, any special, consequential, incidental or punitive damages, nor any damages for loss of business profits, business interruption, loss of business information, or other monetary loss, even if advised of the possibility of such damages.

You may also be interested in

Bar graph showing digital channels preferred by millennials.

Nine ways issuers can improve customer service for millennials

Learn how to attract and retain millennial business by offering high-quality customer service, using the digital channels they prefer.

Read article

Pie graph showing 75 percent check,15 percent ACH,9 percent card, 1 percent other.

Small business credit + debit marketing best practices

Engage small business owners by using proven strategies + tactics.

Learn more

Graph showing Prepaid card, Credit card and other card spending from Q1 2013 to Q4 2015.

Cross-border credit card spending in Brazil

Learn about global travel projections through 2025.

Learn more

Contact Visa Performance Solutions

Contact Us