The New Checkout: Crimped Consumers Lean Into Online Retail and Digital Wallets

Many consumers are under significant financial pressure. Tariffs on everything from clothing to toys to cars are costing the average household $1,700 per year, according to one estimate. Many Americans report dim prospects of landing better-paying jobs and stress from higher utility and housing costs. Younger consumers still in school or early in their careers, and people with children, are hit especially hard.

The strain tracks with a surge in the use of digital wallets—apps on mobile phones and computers that store credit and debit card numbers, concert and airline tickets and boarding passes, with some offering bank-like checking and savings accounts. Shoppers under high financial stress are more than twice as likely as low-stress ones to pay for groceries and retail using digital wallets. The trend suggests that digital wallets are increasingly valued not for their novelty or convenience—no more digging out your credit card and pecking out a PIN—but for the credit options and real-time spending tracking they provide.

Meanwhile, retail spending shows subtle shifts. Though the price of groceries is often used as a stand-in for inflation, grocery baskets actually haven’t changed much. By contrast, the average retail purchase amount has been rising, reaching $92 in November, a 30% increase from $71 in the first month of the year.

These are just some of the findings in “The New Checkout: Crimped Consumers Lean Into Online Retail and Digital Wallets,” a PYMNTS Intelligence exclusive report. This edition of the How People Shop and Pay series examines how financial pressures shape consumers’ retail and grocery purchasing behaviors. It draws on insights from a survey of 2,108 U.S. adult consumers conducted from Nov. 14, 2025, to Dec. 8, 2025.

• The Impact of Financial Stress
• The Growing Popularity of Digital Wallets
• Reshaping Payment Preferences
• Read More
• Methodology

The Impact of Financial Stress

Two in three Americans live paycheck to paycheck, but that doesn’t mean they’re uniformly short on cash for living expenses or emergencies. Many get by that way through choice and careful planning—and as it turns out, 62% of consumers reported not experiencing cash shortfalls for such costs in the past 90 days. Despite their paychecks going out the door the month they come in, these consumers appear to be threading the pocketbook needle to keep their budgets together. Paradoxically, that makes them “low financial stress.”

Still, 17% of all consumers reported cash shortfalls in the past 90 days. That “high financial stress” correlates with the nearly one in four (22%) consumers who live paycheck to paycheck and struggle to pay their bills. Financially stressed individuals are concentrated among younger generations. One in four millennials and Gen Zers reported cash flow shortfalls in the past 90 days for living expenses or emergencies.¹

Similarly, one in four parents with children under age 18 in the household experience high financial stress. This disproportionate difficulty suggests that the costs of childcare and of having more mouths to feed are straining household budgets to their limits.

Not only are younger generations and families bearing the brunt of financial pressure, but they’re also facing increasing strain. Between March 2024 and November 2025, the share of consumers experiencing high financial stress increased by only 3 percentage points. Yet among Gen Zers, it spiked by 12 points, and among millennials, by 8. Parents with children saw a 9 percentage-point increase.

Financial stress impacts how consumers purchase groceries and retail items.

While financial strain doesn’t boost online spending overall, it is linked to more robust online grocery purchases. Consumers under high financial strain are 6 percentage points more likely to purchase groceries online than those under low financial strain. This strong engagement suggests that financially pressured consumers may be seeking options that provide greater control over their budgets and easy access to digital discounts. But it may also reflect a need for convenience. If these individuals are working hard to make ends meet, they may not have time for an in-person trip to a brick-and-mortar grocery store.

One might expect consumers under high financial stress to spend less. However, they spend more per transaction on average than those under lower stress. High-stress consumers spent an average of $109 on their last grocery purchase and $111 on their last retail transaction. By contrast, low-stress individuals spent just $95 and $88, respectively.

This counterintuitive disparity could be the result of financially stressed parents having more mouths to feed. It could also indicate that individuals under financial pressure are planning their purchases and spending more per transaction while consolidating expenditures into fewer transactions. Lower-stress individuals may make more frequent but lower-value purchases.

Interestingly, the gap is more pronounced in online retail shopping, with additional PYMNTS Intelligence research revealing that high-stress individuals spend an average of $169. By contrast, low-stress individuals spend just $96. This finding may support the idea that strained individuals turn to digital channels in order to be more deliberate in their shopping. They may purchase more per transaction to reduce shipping costs or take advantage of limited-time promotions.

Financial stress can also determine which merchants consumers visit.

When it comes to merchant choice, Walmart is winning with financially strained consumers. In fact, 56% of online grocery shoppers under high pocketbook stress made their most recent grocery purchase from Walmart, compared to 50% among those under low stress. Additionally, 37% of high-stress in-store grocery shoppers made their most recent such purchase from Walmart, compared with 26% of low-stress shoppers. Unsurprisingly, high-stress in-store retail shoppers are more likely than low-stress individuals to purchase from Dollar Tree. These disparities show a strong desire among high-stress shoppers for value-focused merchants across channels and across retail and grocery.

Notably, high-stress online retail shoppers are 34% less likely to buy products from Amazon than their low-stress counterparts. Yet they are nearly three times as likely as low-stress online shoppers to buy from Target. It could be that Target is doing a better job advertising low-cost offerings. It might also be that low-stress individuals with money to spare are making more discretionary purchases, for which Amazon has a wider selection.

The Growing Popularity of Digital Wallets

Digital wallet use is on the rise, with Gen Z leading the charge.

Many digital wallets contain credit services like Afterpay, Klarna or Apple Pay Later that allow consumers to split purchases into fixed, smaller payments over a set period at the point of sale. More consumers are using these services for retail and grocery purchases, and the youngest shoppers are spearheading this shift. In November, 15% of consumers paid for their last retail purchase using digital wallets, a 50% increase from March 2024. Among Gen Z, the share more than doubled, rising to 36% from 15%.

Among retail shoppers, it seems that the increase comes more from in-store transactions than from online purchases. The share of consumers who used digital wallets for their last in-store retail purchase increased by 63% over the March-November 2025 period. Meanwhile, adoption for online purchases only increased 19%. For grocery purchases, the pattern reverses, with stronger growth online than in stores. In-store adoption increased by only 38%, whereas digital adoption increased by 55%.

The growing popularity of digital wallets may signal demand among financially constrained consumers for payment and budgeting options with bank-like features, such as Cash App, Venmo and Chime. Among people living paycheck to paycheck and struggling to pay their bills, the share who paid for their most recent retail purchase with a digital wallet climbed 22% from 14% over last March through November. This disproportionate increase may indicate that consumers are using these payment options to access BNPL plans.

Reshaping Payment Preferences

Financial stress is changing payment preferences, driving consumers toward digital wallets.

Consumers under high financial stress are far more likely to use digital wallets. They are more than twice as likely as low-stress individuals to have used the payment method for their last grocery purchase (21% versus 8%) and their last retail purchase (28% versus 11%). These disparities also reinforce the possibility that digital wallets are becoming the go-to for consumers seeking BNPL options.

By contrast, low-stress consumers are four times as likely to purchase groceries or retail products via a credit card not held in a digital wallet. This gap could indicate struggling consumers’ hesitance to risk accumulating more credit card debt. It may also suggest that high-stress consumers are less likely to get approved for credit cards or have lower credit limits.

Not only are high-stress individuals more likely to use digital wallets now; they’re also showing greater increases in adoption. In November, the share of respondents who used digital wallets for groceries (21%) was more than double the March 2024 figure (10%). By contrast, among low-stress consumers, it increased by just 1 percentage point. For retail transactions, the share among high-stress individuals rose to 28% from 15%. Among low-stress consumers, it only rose to 11% from 8%.

It seems likely that wallet adoption is partially driven by financial pressure rather than by enthusiasm for a new technology. Additionally, BNPL could be a key driver of growth for the payment method. Any organization that still views wallets as a neutral payment channel is overlooking their growing role in consumer credit access, risk distribution and financial inclusion.

Read More

PYMNTS Intelligence is the leading provider of information on the consumer trends driving innovation in consumer finance, digital payments and financial inclusion. To stay up to date, subscribe to our newsletters and read our in-depth reports.

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Methodology

“The New Checkout: Crimped Consumers Lean Into Online Retail and Digital Wallets” is based on a survey of 2,108 U.S. adult consumers conducted from Nov. 14, 2025, to Dec. 8, 2025. The report explains how financial pressures shape today’s consumers’ retail and grocery purchasing behaviors. Our sample was balanced to match the U.S. adult population by age, gender, education and income.

^{1. PYMNTS Intelligence uses the following birth dates and approximate age ranges in 2026 for generational cohorts: baby boomers: born in 1964 or earlier and now aged 62 or older; Generation X: born between 1965 and 1980 and now aged 46–61; millennials: born between 1981 and 1996 and now aged 29–45; bridge millennials: born between 1978 and 1988 and now aged 38–48; zillennials: born between 1991 and 1999 and now aged 26–35; and Generation Z: born in 1997 or later and now aged 29 or younger.↩}