The pandemic has given us all a chance to become more refined digital natives.
But let’s consider for a moment that we don’t often think about what’s “behind” embedded finance and payments — especially if we’re younger and more adroit with technology. Instead, we weigh the value exchange — what we’re being asked to provide, versus the value of what’s being provided.
As Walt Granville, senior vice president of bank and network operations and partnerships at Netspend, told PYMNTS CEO Karen Webster, “We talk about FinTech and embedded finance — and I doubt that any consumer of these services has ever heard one of those terms, or really knows what it means.”
More denizens of older cohorts — think boomers and the Silent Generation — have been moving online in droves to transact. Granville cautioned that bringing new online offerings to these older users should be done iteratively, in a way that makes them feel comfortable and, ideally, makes them want to come back.
As elsewhere amid the great digital shift, there’s a clear generation gap. Older users are both skeptical and vulnerable when it comes to interacting with the very apps that could make their online financial lives a bit easier.
A Problem of Packaging
To put it in real-world terms, a consumer opening a Venmo account or setting up the Starbucks app is more than likely unaware that they are establishing a regulated financial account (much in the way that they would, for example, set up a checking account).
However, these same consumers know what sort of experience they want. They know they’re buying into a service that will let them buy what they want, and perhaps earn loyalty points, in a controlled environment. If the experience meets or exceeds those expectations, the brands will win more customers and cement their loyalty. The more features and the more capabilities that come along with that account, the stickier they become.
Granville noted that down the line, consumers will aggregate more of their activities through the app, which will help boost the use of super apps when those apps take shape.
He added that in some cases, providers are focused on senior-oriented bill pay products tied to health care — with education about the new offering placed in the mix well before the point of transaction.
Sidestepping the Booby Traps
This is no easy task, given the fact that, as Granville said, “there are a lot of booby traps in there for the older generations,” even if roughly half of them have moved online.
Older consumers may hold fast to the rules that they’ve been taught as online scams have increased: Don’t give out any personally identifiable information, and don’t give out your credit card number over the phone. Yet, the apps that older consumers are looking to use are asking them to hand over all of that information by entering it online.
Granville noted that creating an informative, user-friendly onboarding experience can go a long way toward addressing this innate mistrust. Let customers know what data is being collected — and what it’s being collected for — on a low-level account, and they’ll be more comfortable when they step up to a bigger one, all within a trusted environment. Eventually, these same users will feel comfortable providing their credentials and account information when setting up accounts on an open banking platform.
See also: Embedding Payments Gives Brands More Control Over Critical Customer Experiences
Healthcare represents a natural fit for older customers to start interacting with apps, entering their data and, ultimately, transacting — and there is at least some precedent here. Granville noted that online games, with embedded finance as part of the experience, can make older adults more aware of how apps and online payments and interactions can all intersect.
In the end, the older population remains independent but with guardrails.
“Having controls and having the ability to participate are among the valuable assets that are being brought to older adults,” he said.
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