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Top 5 Ways Gen Z Is Changing the Future of Payments

Person on phone carrying shopping bag


As fast as technology is changing, so is the impact of today’s young consumers. Generation Z—those folks born since 1996—is reshaping consumer expectations and payment trends in ways that are becoming increasingly apparent.

The eventual impact of this shift on merchants is expected to be profound. The first generation solely of the internet era, this group’s pragmatic approach to money and their native familiarity with e-shopping, mobile payments, and all things digital translate to enormous opportunities—as well as challenges—for the world of commerce.

In both the workplace and marketplace, the influence of this younger generation is becoming greater than even that of well-established Millennials. Indeed, the new generation’s more conservative approach to working, spending, and saving can already be seen.

More than three-quarters of Gen Z are earning their own spending money, while 10 percent are already saving for retirement. Even those at the younger end of the spectrum, born in the early- to mid-2010s, appear more financially focused, with 21 percent of Gen Z having acquired a savings account before the age of 10, according to a recent study by Discover® Global Network and The Center for Generational Kinetics® (CGK).1

These trends are occurring as the oldest members of Gen Z, having grown up through the Great Recession that began in 2007, are entering the workforce. Set to become the largest cohort of workers and consumers, members of Gen Z are shaping new trends and amplifying their voices and opinions through friends and social media.

We can now see these trends affecting both brick-and-mortar and online merchants in various ways. Based on the recent survey by CGK and Discover, which interviewed 1,256 people in the U.S. from the ages of 18 to 52, these five key findings are what every merchant should keep in mind:


1. Gen Z is a generation of tech-savvy shoppers

With the introduction of the first iPhone before the oldest Gen Z shopper even hit their teens, this generation doesn’t know a time when smartphones did not exist. Today, nearly three-quarters (71 percent) use them to compare while shopping, and almost a third (31 percent) have actually purchased something on their phone while in a different store.


2. Gen Z will tell others about their experiences, both good and bad

This generation was born into social media and is not shy about using it. More Gen Z consumers (41 percent) have posted online comments about positive payment or checkout experiences while only 35 percent have posted online comments about bad experiences. And half (50 percent) of Gen Z have recommended a store, restaurant or merchant based solely on the fact that it was easy to pay.


3. Payment options and convenience drive Gen Z’s consumer decisions

Payment experiences are not just important to Gen Z; they are more likely than any other generation to consider payment options and convenience in advance. Nearly two out of five (38 percent) said they are at least sometimes more likely to choose a store based on payment options, and almost as many (36 percent) evaluate payment options in advance.


4. Both anticipating and actually having a bad payment experience are more stressful for Gen Z

Whether because of age or temperament, more than half (54 percent) of this generation reports feeling some or even high stress when their preferred payment is not accepted. Even more (58 percent) said they would not return to a store after a bad experience.


5. Easy, positive checkout experiences can build repeat purchases and loyalty

Ease of payment for this generation is key. In fact, 43 percent actually equate fast checkout or payment with both store and product quality. And nearly half (49 percent) of Gen Z said they “love” self-checkout. Just as many (48 percent) said the best way to win their loyalty in an online store is through an easy payment system. In fact, more than a quarter of Gen Z (28 percent) said they would shop consistently at a store with frictionless checkout.

Without a doubt, this younger generation has new desires, new needs, and new expectations about what makes a satisfying consumer experience. More than a third (36 percent) of consumers already avoid merchants that don’t accept their preferred form of payment.

How all this affects the future of commerce is still unclear, but the marketplace today has no choice but to pay attention. The trends we are seeing are just the beginning. So, while these findings bring into focus the immense changes occurring, the impact of Gen Z will only continue to grow.

Understanding the new generation and providing a full range of options—from accepting all types and forms of payment to ensuring a quick and easy checkout—is what today’s merchants must address to drive a positive customer experience.


To learn how Gen Z is changing the merchant experience, read the full report.  

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1 Gen Z Goes Shopping: How Payments is Shaping the Future of Commerce, Survey conducted by The Center for Generational Kinetics, 2019, in partnership with Discover® Global Network


The information provided herein is sponsored by Discover® Global Network. It is intended for informational purposes, and is not intended as a substitute for professional advice.