Latest News Payment Systems paytech

Digitized Money has Paved the Way to the Pay-As-You-Go Industry

Slowly but surely, digital money is becoming the norm, and it is having an incredible effect on a number of industries.

Of course, everyone knows that digital money is making it easier for people to pay bills, like car insurance bills, but this ability is just the tip of the iceberg. This new digital currency era is also making it easier for customers to only buy what they want.

The payment model just mentioned is sometimes called micropayments or pay-as-you-go, which is rising in popularity.

 

Why are Micropayments on the Rise?

There are a number of reasons why micropayments are on their way up. People only want to pay for what they need, nothing more. This is evident across many industries. For example, there are now budget airlines offering airplane tickets at a low price by removing little perks that are usually offered by large airlines, such as complementary food or legroom.

It is easy to see these changes across many industries, but what might be a little harder to figure out is why. One thing that makes micropayments so attractive is they are cheaper, compared to regular prices. Another thing that makes these sorts of payments attractive is they take away the contract problem. A number of folks are starting to realize that contracts are like traps, forcing a person to pay a particular amount of cash each month or deal with unsurmountable fees.

Folks do not like to be trapped and no longer accept these sorts of situations, which is part of the reason pay-as-you-go is rising in popularity. In essence, the American consumer is simply scared of making financial commitments.

The group driving this particular change is millennials, but the idea is definitely attracting other generations. Part of the reason millennials seem to fear financial commitments is simply because money does not seem like something to count on. This generation is driven by experience, and they want to experience anything at any time without worrying about a bill they must pay.

It should be pointed out that streaming services are also quite popular, but none of them come with a contract or fees simply because the service is canceled. Undoubtedly, the contract financial model is feeling the pressure. Some say that the reason this type of financial model is no longer working has to do with the economic crash the United States just suffered.

Millennials and other groups of people noticed how quickly money can disappear, leaving people without much to pay their bills. All one needs to do is put oneself in the shoes of these individuals to understand why contracts are no longer appealing, including other common financial tools such as credit cards or loans.

People are also loving micropayments because companies are offering fractured products or services. Many companies offered jam-packed products or services with a hefty price tag, yet some people do not need jam-packed products or services; sometimes, people only need a service for a little while or only need to borrow a product. Micropayments have made it possible for people to buy products or services in this manner.

For example, most people have to pay a lot to have car insurance, even if they do not drive often. This is no longer necessary because there are companies out there like Metromile allowing individuals who do not drive often to pay as they use the car insurance. A car owner or car burrower can save hundreds of dollars because they only have to pay insurance as needed and be free from that bill the rest of the time.

Digital money has definitely changed things around for Americans. It has given many of them more power regarding how they spend money. Micropayments is just one of the results of this switch, but there are bound to be more to come as time moves on. It is important to pay attention to these changes because businesses that want to flourish as millennials continue to become the biggest spending block will need to provide these types of options to stay afloat.

Related posts

Regtech for regulators: re-designing of the regulatory architecture

thefintechtimes

FinTech in South Africa: Accelerating the Digital Transformation of Banking & Financial Services

thefintechtimes

Pension Dashboard Proposals Could Substantially Grow Savings and Improve Financial Inclusion

thefintechtimes