The strategy is in the mix

Developing a payments strategy that directly addresses Generation Y's delicate financial security, growing earning power and changing lifestyles is key for mortgage companies. Having a diverse menu of options, including multiple payment channels and types, is the most strategic way to serve this population segment. This should include accepting Internet, interactive voice response, mobile, call center and walk-in payments with the ability to take multiple payment types.

All segments increasingly prefer debit cards, but they are especially favored by Gen Y. In a recent study, 33 percent of this market segment said they have paid more bills with debit cards than before. Widespread acceptance and a direct link to cash flow makes purchases and bill-pay management with debit cards easier and less costly, while also posing little risk to credit scores — providing the control, convenience and flexibility young money managers are seeking.

Having practically cut their teeth on technology, managing their finances electronically is second nature for members of Gen Y — 63 percent prefer to receive their bills on the Web or via e-mail. They also pay electronically and often appreciate companies that offer electronic payment options, opting to use biller sites over bank-payment options. In fact, 33 percent pay online through their bank's website and 38 percent pay online directly at the biller's site. This is especially notable because many billers currently charge a service fee for certain types of payments, while banks often don't — a potential added source of revenue for billers that recognize the opportunity.

A generation of people who are constantly on the go and increasingly dependent on their smartphones for everything from entertainment to shopping to financial management, Gen Y will drive increased demand for mobile presentment and payment channels. Already, 52 percent of millennials own a smartphone, compared to 35 percent of the total population.

Reeling in Generation Y revenue will require mortgage companies to be as agile as this segment. Keeping in mind that Gen Y wants — and is accustomed to getting – it all, mortgage companies must now prepare and implement smart, momentum-building plans designed to position servicers to capture this growing set of borrowers.

Missy Zakett is vice president of sales, enterprise banking at Western Union Payments. She joined the company in 2001 after working for more than 20 years in the financial-services and mortgage industries. Zakett is a member of the Mortgage Bankers Association and the American Institute of Certified Public Accountants. She has a bachelor's degree in accounting from the University of Florida and is based in Laguna Niguel, Calif. Reach her at missy.zakett@westernunion.com.

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