Ready Your Business for Gen Z and Its Unique Payment Expectations

Digitally native Generation Z will soon become the largest cohort of consumers. Adapting to their preferences will be a priority for brands looking to capture this lucrative market.

Ready Your Business for Gen Z and Its Unique Payment Expectations

A new generation is officially here. The oldest of Generation Z is now coming of age and will soon surpass Millennials as the most populous generation on earth.

With sheer numbers comes sheer buying power. Already strong, this buying power will only grow as Gen Z ages into their highest-earning years. Ready to capture this market are businesses that not only understand this unique cohort but are making changes to best meet their preferences.

So who is Gen Z?

“Members of Gen Z—loosely, people born from 1995 to 2010—are true digital natives: from earliest youth, they have been exposed to the internet, to social networks, and to mobile systems. That context has produced a hypercognitive generation very comfortable with collecting and cross-referencing many sources of information and with integrating virtual and offline experiences.”


This is a group whose experience of the Internet has shaped them more thoroughly than anyone else before them. They are shunning Google, and instead searching via TikTok. The average Gen Z got their first smartphone just before their 12th birthday. They communicate primarily through social media and texts and spend as much time on their phones as older generations do watching television.

It’s clear this is a group of people for who e-commerce – and even more so, m-commerce (mobile-commerce) – is second nature. They have grown up in an environment where almost everything can be accomplished with a finger swipe on a smartphone. And this includes payments. 

Gen Z: digitally-savvy and debt-aware

Gen Z expects payments to be embedded, immediate – and almost entirely via smartphone. Whether it’s buying a t-shirt, paying for transport, ordering and paying for food, booking and paying for holidays and making investments – Gen Z wants to do it with a couple of taps on their phones. 

This propensity for digital finance is also reflected in their choice of banks. Both Gen Z and Millenials are more likely to use digital banks than older generations. 

While just 3% of those aged 55-64 use digital banking according to recent research from Oliver Wyman, more than 20% of those aged 18-24 did – with that percentage expected to grow significantly. 

Why? Because digital banks not only offered the type of embedded finance experience Gen Z expects but also offer “creative payment solutions that are attractive to younger customers”.

These ‘creative’ solutions don’t necessarily extend to credit cards, though, with this generation having a much lower tendency to use them than every other generation before them. 

“Less than half of Gen Z consumers have a credit card — compared to 61% of Millennials, 65% of Gen X, and 81% of Baby Boomers. Even among Gen Z consumers that do use a credit card, 53% pay off the total balance every month.”


Merchants must think mobile-first

With retail sales from m-commerce in the United Kingdom expected to surpass the 100 billion British pounds mark by 2024, mobile wallets are no longer optional for institutions looking to appeal to Gen Z money habits.


Of individuals in the UK between the ages 16 and 24 owned a smartphone in 2022.


Of Gen Z consumers say they have connected money-related apps to their financial accounts. 

Businesses most successful in catering to this cohort will not only have efficiently designed mobile websites and social commerce channels but also embedded payment options. This doesn’t necessarily mean businesses will be required to go it alone though, with Gen Z highly responsive to third-party partnerships when it comes to payment transactions. In fact, more than 75% of Gen Z say they’re comfortable using a tech company to facilitate online payments.

Read More

How Brands Are Boosting Their Business With Embedded Finance

Alternative payment options

Seamless access to embedded mobile payments may not be enough to win over Gen Z, however. They also show strong preferences for a choice of alternate payment options such as BNPL solutions and cryptocurrency. 

A growing contingent of networks, big tech, and e-commerce merchants is encouraging cryptocurrency as a form of payment in response to studies that have found that almost half of Gen Zers and Millenials have owned or currently own cryptocurrency.

Buy now, pay later (BNPL) finance is also expected to grow in response to Gen Z preferences. New research shows that nearly 60% of consumers across the board say they prefer buy now, pay later over credit cards, with this preference especially pronounced among younger consumers.

Read More

BNPL and POS Financing: The Next Frontier of Growth, or Risky Business?

The takeaway for businesses

Crucial to capturing the highly lucrative Gen Z market is offering the most relevant forms of payment to attract this next generation of buyers. A 2022 study showed that almost half of the customers overall — 51% of Millennials and 48% of Gen Zers — will abandon a purchase if their favourite payment method isn’t available.

For Gen Z, that means the ease of a few clicks via mobile – possible with the type of embedded finance offered by Techcap.

We’re committed to future-proofing your payments. Find out how your business can stay ahead of the curve with Techcap’s scalable solutions that grow with you and your customers.


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