You got a friend request from Granny

17

October

2019

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Imagine a person receiving a “you got a friend request” notification on Facebook. You would be forgiven if you imagined a teenager glued to his smartphone. However, a more appropriate image would be of an elderly using her smartphone. Facebook, with over 2bn users, launched over 15 years ago (The Economist, 2019). The giant worked its way in the daily lives of hundreds of millions of people. Parents express frustration with their teenagers glued to their smartphones’ screens, endlessly scrolling through feeds via the “infinite scroll” feature. Interestingly, however, do young people increasingly shy away from the platform. In fact, according to eMarketer, a consultancy, are 16-year-old Americans less likely to use Facebook than 60-year-olds are. Facebook’s shifting user demographics show a similar trend in the UK, where over-55s make up Facebook’s largest user group (The Guardian, 2018). What are some of the reasons that young people swipe left when thinking of Facebook? But, more specifically, why do Nan and Pop swipe right?

Facebook has had a rough couple of years with scandals such as Cambridge Analytica, and Russian meddling. A few reasons for youngsters leaving Facebook are listed. First, teenagers being teenagers, it’s not cool to use the same social media as your parents (Tech.co, 2018). Second, it’s addictive. Pew Research Center reported that 54% of US teens believe they spent too much time on social media (Pew Research Center, 2018). Among social media, Facebook is ranked first, with an average of 38 minutes spent per day (eMarketer, 2019). Thirdly, there’s a shift in popularity to video instead of text (The Conversation, n.d.) This might explain the growing popularity of Instagram, Snapchat, and TikTok.

But, how come older people flock to the platform? A study by Coto et al., (2017) posit various reasons for this phenomenon. First, improved social interaction prevents loneliness and isolation. Also, because of limited mobility, Facebook, and social media in general, enables the elderly to maintain social connections. Interestingly, the elderly use Facebook ‘the old way’ by growing friends, share photos, and status updates (among other things). Lastly, the platforms are widely popular because of healthcare-related benefits. The elderly frequently use it to gain information on healthcare services. All in all, the elderly use Facebook as a means to improve the quality of life. Be it healthcare or social connectedness.

Sources

Youngsters are avoiding Facebook-but not the firm’s other platforms. (2019, July 20). Retrieved from https://www.economist.com/graphic-detail/2019/07/20/youngsters-are-avoiding-facebook-but-not-the-firms-other-platforms.

Sweney, M. (2018, February 12). Is Facebook for old people? Over-55s flock in as the young leave. Retrieved from https://www.theguardian.com/technology/2018/feb/12/is-facebook-for-old-people-over-55s-flock-in-as-the-young-leave.

Cawley, C., Fogden, T., Turner, J., & Conor, C. C. (2018, June 7). 4 Reasons Why Facebook Has Lost Young People Forever. Retrieved from https://tech.co/news/facebook-lost-young-people-forever-2018-06.

Jiang, J. (2018, November 30). How Teens and Parents Navigate Screen Time and Device Distractions. Retrieved from https://www.pewinternet.org/2018/08/22/how-teens-and-parents-navigate-screen-time-and-device-distractions/.

Williamson, A. (2019, May 30). US Time Spent with Social Media 2019. Retrieved from https://www.emarketer.com/content/us-time-spent-with-social-media-2019.

Brake, D. R. (2019, October 8). The social implications of teens leaving Facebook. Retrieved from https://theconversation.com/the-social-implications-of-teens-leaving-facebook-99362.

Coto, M., Lizano, F., Mora, S., & Fuentes, J. (2017). Social Media and Elderly People: Research Trends. Social Computing and Social Media. Applications and Analytics Lecture Notes in Computer Science, 65–81. doi: 10.1007/978-3-319-58562-8_6

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Time is Money!

14

October

2019

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Remember the days when bank transfers took several days or even longer? Most probably not. Under nations’ domestic payment schemes, transactions were common to take several working days. The idiom “time is money” perfectly applies here, with the European Commission estimating savings to the EU economy ranging € 100bn a year with the introduction of a more efficient initiative (RTÉ News, 2007). In 2014, these traditional schemes were put to an end because the Single European Payments Area (SEPA) initiative made it possible to bring bank transfer times down to a maximum of one working day, and frequently just minutes or even seconds. Moving forward to 2019, with SEPA Instant Payments live, payment transactions increasing, and a cashless society gaining popularity, it’s worthwhile to explore an important actor amidst the European future of payments.

Payment service providers (PSP) or payment processors are an intermediary, able to interact and integrate with players (e.g. banks, credit card providers, and e-commerce platforms) to facilitate the payment transaction. Facilitating a payment transaction involves authorization, merchant contracts, payment gateways, payment requests, execution and settlement (Worldpay, 2019). PSPs offer a one-stop-shop solution for merchants so that you can purchase that cheap Ryanair ticket, or resell your current still-good-for-another-year smartphone.

The EU is on a mission to foster market competition, consumer choice of payments services, and consumer protection and has therefore launched PSD2. Under PSD2, an abbreviation for Payments Services Directive 2, licensed third party providers will gain access to consumer account information and payments (SWIFT, 2018). In fact, PSD2 creates a new market for PSPs: Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs). Because PSD2 opens the PSP market, incumbents must find ways to differentiate themselves in order to stay competitive.

So what can PSPs do to compete against incumbents and an expected influx of new players? According to INNOPAY (n.d.), a consultancy specialized in transactions, one of the possibilities for PSPs is to leverage their current strategic position and apply it within the PSD2 ecosystem. Through their traditional role, PSPs already have an established relationship with consumers and merchants. They can leverage this relationship by offering value-added services such as personalized interactions, authentication and authorization, and other money-transfer methods. Herewith, increasing customer interactions to retain and grow their customer base.

References:
RTÉ News. (2007, March 27). Agreement reached on cross-border banking. Retrieved from https://www.rte.ie/news/2007/0327/87216-banking/
Worldpay. (2019, July 10). What are payment service providers? Retrieved from https://www.worldpay.com/en-us/insights-hub/article/what-is-a-payment-service-provider.
SWIFT. (2018, October). The transformation of the European payments landscape. Retrieved from https://www.swift.com/news-events/news/the-transformation-of-the-european-payments-landscape
Cortet, M., & Mintjes, D. (n.d.). PSPs in Europe: How to stay afloat in choppy waters. Retrieved from https://www.innopay.com/en/publications/psps-europe-how-stay-afloat-choppy-waters

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