A nationwide study for Clearpay by YouGov, finds that UK Millennials want more innovation in retail and financial services – and are looking for more flexible ways to pay.
As a result, Clearpay – part of global payments innovator Afterpay Touch Group – is to launch an app allowing UK consumers to use its buy-now-pay-later service on their mobile phones.
Available from the App Store shortly, the Clearpay app will allow people to browse for products in it online store directory, track orders and manage their accounts. It will also offer a new facility allowing customers to settle outstanding balances early if they wish. The global business already has an app in the US, now widely used for online purchases.
In its newly-published report for Clearpay, UK millennials, shopping and money, YouGov reveals profound generational differences in how people like to pay, and notes that young people aged 18-35 are principally interested in new services they can use on mobile phones.
It also reveals that young Britons are “credit averse”. According to YouGov, barely half of UK 18-35s own a credit card and of those without, 93% said they don’t want one.
This is a profound generational shift in attitudes to debt which, YouGov says, may be due to rising student debt – _which now impacts 76% of current or former students (aged 18-24), and 56% of those under 35s.
UK Millennials prefer to pay by debit for almost every type of product and a third already use digital wallets, YouGov notes. This has major implications for retailers and financial services as Millennials are the most valuable consumer group, expected to represent 35% of the global workforce by 2020. In the UK they currently number 13 million, around 20% of the population.
“Clearpay signed up more customers in its first 15 weeks in the UK than the business did in either the US or Australia at the same stage,” says Carl Scheible, CEO of Clearpay. “Most of our customers are young, and 90% have been tracking their purchases on mobiles. The app will make this much easier, and also give to access other services helping people to budget and manage their money – including making early payments if that suits them better.”
Clearpay’s service, launched in the UK this year allows people to pay just 25% of the full purchase price up front, reducing their upfront cost. The balance is automatically taken in three further debit payments over two months, with no interest charged to the customer.
“In the UK young people in particular are looking for new ways to budget and make purchases without falling into debt,” Scheible adds. “Our experience in other parts of the world has been that they use our app as a budgeting tool to help track and manage their money.”
The research also goes on to find that 85% of UK Millennials are stressed by the idea of being in debt with almost half (48%) saying they’re scared of buying things using credit, compared to 33% of Gen X.
It also finds that young Britons are predominantly savers rather than spenders. YouGov notes that over half (53%) of younger Millennials and 42% of 25-24s see themselves as more savers than spenders, which compares to just over a third (35%) of Gen X.
Equally, 9 in 10 UK Millennials say they actively manage their money and believe they’re good at saving for things they want (66% of Millennials compared to 59% of Gen X).
Fashion, clothing and accessories is the biggest spend for Milliennials after going out; on average young people spend half their monthly discretionary income on clothes. Four out of ten said clothing is their highest priority after social life for disposable income.
Clearpay launched in the UK in June this year, following rapid growth across the US, Australia and New Zealand by its parent company, Afterpay Touch Group, co-founded by Nick Molnar, himself a Millennial. It has pioneered a new deferred payments service which is interest free and, in just over four years, has been adopted by over 5 million consumers and 35,000 retailers worldwide, including Urban Outfitters, Boohoo and JD Sports in the UK.