By Anne Hay, EVP & Chief Marketing Officer, PayNearMe
Born in the 1980s and 90s, Gen Xers were considered technology pioneers. They catalyzed the digital revolution, ushering in the era of personal computing and mobile technology.
Fast forward to 2024, and half of these once-early-adopters (50%) have yet to fully embrace self-service bill payment, according to a recent consumer survey. Gen X payers tend to use cost- and labor-intensive payment methods—20% pay by mail, 19% call customer service to make a payment, and 11% pay in person at the lender’s office. That’s not terrible news, but it certainly leaves much room for improvement.
Lenders know enabling more self-service for loan repayment can help simplify the lives of payers—especially those with busy and complicated lives. By understanding and addressing the unique preferences of their Gen X borrowers (ages 45-60), they can transform potential pain points into opportunities for improved engagement and efficiency.
GenX at Peak Earnings (and Debt)
Middle-aged Americans have a lot on their plates, often caring for children and aging parents while juggling careers and other leadership roles.
Their financial plates are also full, so to speak. Gen Xers manage the highest average non-mortgage debt load of any generation at $157,556, compared to $125,047 for millennials, $94,880 for baby boomers, and $29,820 for Gen Z. Add to that mortgage debt averaging $278,935.
Not surprisingly, 56% of Gen Xers surveyed say the process of managing and repaying loans causes stress or anxiety. We know that’s partly due to the pressure of repaying significant loans during difficult economic times. However, the process by which they pay bills can also contribute to anxiety.
Here are three ways lenders can create an easier, more seamless payment experience that can reduce stress for borrowers while boosting their ability to pay independently and on time.
Three Opportunities for Gen X Borrowers
- Make autopay a no-brainer.
Though 64% of Gen Xers in the survey say they wish managing and paying loans was easier, they are not taking advantage of one of the easiest ways to achieve that goal: autopay.
Nearly half (49%) are not fully utilizing autopay, 35% are using it for only some of their loans, and 14% are not using it at all.
They have various reasons for their choices, such as wanting a simpler way to set up automatic recurring bill payments (27%) and needing more control over when those payments are withdrawn from their account (61%). However, those concerns can be addressed through simple adjustments supported by your payments platform provider.
For instance, purpose-built payment platforms allow lenders to offer a range of flexible payment schedules, including monthly, weekly, twice-monthly or every other week. That lets borrowers better coordinate the automatic withdrawal with their payday schedules.
It’s all about flexibility and control. When borrowers can set up autopay schedules that match their financial situations, they are more likely to sign up.
Payment platforms can also make sign-up easier by providing personalized QR codes or links to take payers directly to a dynamically populated enrollment form, so the sign-up process only takes minutes.
Strategies like these lead to an increase in autopay enrollments and, as a result, fewer late payments.
- Reduce the number of steps.
Digital, self-serve payment should be the ultimate “easy button” experience, yet the consumer survey showed that borrowers are getting stuck in the payment funnel. For instance, 42% of Gen Xers struggle with remembering logins and passwords, and 40% have trouble keeping track of due dates.
Any one of those obstacles can cause the borrower to abandon a self-service payment and revert to calling customer service—an expensive option for the lender.
What if, instead, borrowers receive payment reminders via email, text message or push notification so they don’t have to keep track of due dates? The reminders can include a personalized link that takes the borrower directly to their payment screen. No passwords or account numbers required.
The payment provider can also prepopulate the payment screen with personalized information such as the payment amount, interest rate and most recently used payment type. Now you’ve removed several steps it would have taken the borrower to make a payment. Payment is completed with a few clicks or taps, and the borrower can move on to the next task.
- Give them options (but don’t overload them)
Gen X payers appreciate having a mix of payment channels and types to pick and choose what works best for them.
That includes payment types such as digital wallets. In the survey, more than 6 in 10 middle-aged payers (62%) said they would like to have PayPal as a loan repayment option. Nearly the same number (57%) wanted Apple Pay as an option.
The same holds true for payment channels. About 1 in 5 Gen Xers still pay loans by mail (20%) or phone call (19%), but 71% use the biller’s website or mobile app, and 50% use their primary bank’s “pay a bill” service. That tells us there’s a comfort level with digital engagement that can be encouraged and developed.
Of course, sometimes too many choices can cause overload, which about half of Gen Xers (52%) reported as a problem. Lenders can address that paradox by having their payment provider dynamically present payment options based on each borrower’s history and preference. That protects borrowers from scrolling through a long list of payment types to find their preferred option.
Building Valuable, Long-Term Customers
When you think about Gen X payers and the high value they bring to lenders who earn their business, it’s not hard to imagine how improving their payment experience becomes a smart investment.
Increasing auto pay or self-service takes the pressure off overburdened staff members who field payment-related calls or process check payments. That’s a savings of time as well as money.
A better payment experience also translates to higher rates of on-time payment. When borrowers are prompted when it’s time to pay and can complete payment in a couple of taps or clicks, lenders will see fewer delinquencies and greater borrower satisfaction with the payment types and channels they prefer.
There are long-term benefits as well. Gen X borrowers care about the payment experience and will reward lenders who deliver it more than any other generation surveyed. In the survey, 85% said an exceptional bill payment would influence their decision to work with the same lender in the future, and 73% said they would recommend a lender to friends or family if it offered a highly personalized experience.
This loyalty multiplier extends beyond individual Gen X borrowers. As a generation now in their peak earning years, many Gen Xers are actively helping their children enter major financial milestones—whether by co-signing, contributing to down payments, or fully financing their children’s car purchases and first homes.
Lenders who earn Gen X loyalty through superior payment experiences aren’t just securing one customer; they’re potentially gaining access to the next generation of borrowers, creating a pipeline of new business opportunities through family connections.
Now that you know what motivates Gen X, you can boost self-service adoption by creating simple, more intuitive payment experiences that deliver the efficiencies this demographic demands.
About the Author
Anne Hay is EVP and Chief Marketing Officer at PayNearMe. With more than 17 years of experience in B2B SaaS marketing in the payments industry, Anne is focused on covering the consumer and business trends lending organizations can use to inform and guide their payment strategies.