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Posted June 22, 2022 by FreedomPay

Trading U.S. Dollars for Gen Z Data: Navigating the Currency Exchange Rate

Guest Blog By: Suran Min, MPS Student at Cornell University

Which will be the next generation to lead global consumption? Which group of consumers we should target as a commerce platform?” Liesl Smith, Senior Vice President of Marketing and Sales Enablement at FreedomPay ponders during our first research conference. With absolute certainty, Liesl tells us, “Generation Z.” As GenZers, our group members sit up a little straighter, sensing the relevance and enormity of the research we were embarking on..

Generation Z, which comprises nearly 40% of total consumption in the U.S., displayed their concerns about data privacy through the secondary research and our data analysis. Gen Z are more reluctant to share personal data with third parties than Millennials are, making it harder for merchants to collect their consumer data.

Our data analysis confirmed our hypothesis: to incentivize data sharing, monetary rewards need to be offered. These might take different formats, such as cash discounts or loyalty points. This inspired us to study how Generation Z’s willingness to share data is impacted by monetary incentives, the type of private data this most strongly influences, and which format of monetary rewards Generation Z prefers. 

We designed a survey to evaluate fellow Cornell students’ willingness to share different types of data. We used a Likert scale from 1 (very unlikely to share data) to 6 (very likely to share data), both with and without offering monetary rewards. 

Participants’ data was categorized into three levels: low-privacy, including. name, Birthday, and age); medium-privacy, such as shopping preferences and social media account handles; and high-privacy, concerning medical records, and their Social Security Number. Finally, participants compared cash discounts with loyalty points as an incentive for data sharing.

Data analysis showed that Generation Z is considerably more cautious of sharing data than other generations. However, the overall willingness to share is positively impacted by financial incentives.

The categorization of data privacy levels facilitated a more comprehensive analysis. We found that the exchange of medium-privacy level data was the most susceptible to monetary incentives. The impact of monetary rewards on low- and high-privacy level data is not as prominent.

Medium-privacy level signifies that the data has limited confidentiality, containing more personally identifiable characteristics than low-privacy level data such as name and age. Nevertheless, unlike high-privacy level data, medium-privacy level data does not contain sufficient information to precisely identify a unique individual.

GenZers are reluctant to disclose high-privacy level information, somewhat willing to exchange medium privacy level information for monetary rewards, and are most open to disclosing low-privacy level information. TAs such, companies should focus their efforts on generating value from more obtainable medium-privacy level information.

Finally, 69% of GenZers prefer cash discounts over loyalty points (31%). GenZers who chose loyalty points were most interested in redeeming points in the Food & Beverage industry. Most participants who chose cash discounts stated that they would accept loyalty points if their value were as equivalent to a cash discount. However, existing loyalty schemes using points may not offer the value exchange that consumers demand.

As Generation Z highly values data privacy but shows a willingness to exchange data containing limited personal information for monetary rewards, this presents an opportunity for companies like FreedomPay to generate value from data to better serve both merchants and consumers.


Download Effects of Monetary Rewards and Data Privacy Levels on Generation Z’s Willingness to Share Personal Data here.

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