How to make payments more inclusive for older people

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Financial exclusion in the older population continues to rise and businesses must work together to find solutions that can help this group transition as payments become more digital.

What is this article about? While many older people are digitally savvy and happy to use modern payment methods, there are over three million over-65s who are not online and an estimated 2.4 million who depend on cash. This article explores financial exclusion in this demographic and how the payment industry needs to cater to their varying needs.

Why is this important? Financial exclusion in the senior population continues to rise as many cannot understand the digital shift to modern financial services. With bank branches closing and moving their services online, the payment industry must address the needs of this group. 

What’s next? By listening to the older population, the payments industry can identify and understand their needs. They can look to solve these challenges by designing products and services that combat their concerns. If the industry can unite to deliver what the audience is asking for, they can deliver products that make payments accessible for the older generation.

There are 11 million people aged 65 and over in the UK, according to the Centre for Ageing Better – that’s 19% of the total population. In ten-years, this figure is predicted to have increased to almost 13 million – 22% of the population.

“It’s a misconception to say that an older consumer is not digitally adept,” explains Sash Margrie Hunt, chief product officer of Kalgera. “Many over 60s were using digital propositions prior to Covid and like everyone else, they had to adopt digital banking and payments solutions.”

The coronavirus pandemic forced the older generation to try electronic payments. In fact, those aged 50 and above were Paypal’s fastest-growing segment from March to April 2020.

Caroline Abrahams, Age UK charity director, says: “Many older people are happy to pay with modern payment methods, are digitally savvy, and can quickly learn how to use new technology.

“However, over three million over-65s are not online, and an estimated 2.4 million are dependent on cash. This is a huge number of people at severe risk of being left behind as payments increasingly go digital.”

Financial exclusion in the senior population continues to rise as many cannot comprehend the digital shift to modern financial services. This is accentuated as more banks make their services available online and bank branches continue to close down.

Addressing the payment needs of the older population

“It’s important that the payments industry and banks, working with other industries across society, continue to ensure that non-digital payment methods are accessible and affordable,” adds Abrahams.

“No payment method should ever be off the table – people rely on different methods as it helps with money management and budgeting, which is particularly important in the current cost-of-living crisis. So even if someone wants to pay their energy bill with a cheque, it should be fine to do so.”

The challenge here is striking the balance between delivering online payments and supporting customers, explains Jayne Sibly, co-founder and CEO of Sibstar.

She suggests the answer lies in investing and collaboration to design a tailored modern banking service and customer service solutions.

“This is where the real difference could be made,” she says. “Everyone has the right to a good life as they age and how people manage their money is central to that.”

Security needs to be at the forefront

According to Age UK’s Abranhams, the payments industry could do more to facilitate a “safe and secure” transition to digital such as investing in scam prevention and ensuring victims are refunded their losses.

“At present, too much risk sits with the older person, and it’s no wonder that many are worried about banking and making payments digitally,” she says.

Security is a priority because many have fallen victim to fraudsters for various reasons such as dementia causing cognitive impairment; a willingness to engage with scammers because of loneliness; or just a lack of suspicion.

Strides are being made in this area. Kalgera, a mobile and web application, uses technology to help financial institutions identify and support vulnerable customers, explains Hunt.

“We are also able to flag potential financial abuse, which our older consumers may fall prey to,” he adds. “Vulnerability is often the precursor to fraud and scams, so it shouldn’t be underrated as a valuable tool in this fight against fraud.”

Meeting the needs of the older population

For many older people, it’s not just about “bigger buttons and icons on a smartphone or tablet”. According to Hunt, this group of people want to have the option to use digital solutions such as contactless payments, sending money to friends and family and investing platforms.

However, they also want human intervention if something goes wrong and be able to go to a branch to withdraw cash, speak to staff and spend money locally.

“Having the choice is what matters to this consumer group,” says Hunt.

Sibly believes that collaboration “across the sector and, importantly, with older people themselves” is what’s needed to design products and services to meet their needs.

“By working with them to understand the obstacles and listening to their ideas for how to solve these challenges, we’ll then be able to design products and services that really hit the mark,” she explains.

“[The] industry needs to come together to deliver what the audience has asked. Not one organisation, small or large, has, or actually needs to have all the answers. We can work together to deliver bigger, better, stronger products that make a positive difference in people’s lives.”

Can prepaid cards drive financial inclusion for all?

The biggest risk factor for dementia is age. About two in 100 people aged between 65 and 69 have dementia. This rises to one in five for those aged between 85 and 89.

Sibstar, a flexible debit card solution for people suffering from dementia, shows how technology innovation and consumer empathy can create solutions for lifestyle banking for age and disability.

Prepaid cards represent a viable alternative for the unbanked generally, allowing them to access and store their money in the absence of traditional bank accounts and services.

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