The Five Rules of Engagement for Gen Z Spending and Payments

Generation Z is rewriting the rules of engagement for the financial services sector. Full stop. As the first true digital natives, their expectations, spending patterns and banking preferences are shaping the future of payments, credit and commerce. Drawing on PYMNTS Intelligence research from 2025, as well as relevant executive interviews from PYMNTS, these five “rules of engagement” distill the essential data, executive insights and behavioral trends that define Gen Z’s approach to money.

Digital-First, Instant-Everything

Gen Z’s financial philosophy is shaped by a “let’s do something now, or let’s not do it” mentality. Elena Casal, Chief Client Officer at The Clearing House, explains: “They’re digital-first, and they also have a philosophy of ‘Let’s do something now, or let’s not do it.’ There’s not a case for ‘later.’ The time is ‘now’ to transact.” This has translated into a demand for instant payments, real-time account visibility and seamless digital wallet integration.

83 million: The number of digital wallet payouts to bank accounts in the past year, reflecting Gen Z’s preference for instant, frictionless money movement.

Gen Z expects 24/7 access to move money between wallets and bank accounts, essential for managing gig work, side hustles and everyday life.

Mobile Banking and the Rise of the “Open-Banking Grand Central Station”

Mobile apps are the epicenter of Gen Z’s financial lives. According to PYMNTS, 57% of Gen Z primarily uses mobile banking apps, and 94% approve of their access to financial services. This cohort demands a seamless, all-in-one experience — using their banking app as a hub for everything from saving and investing to credit management. Yet, loyalty is fragile. More than one in three Gen Z credit union members say they are somewhat likely to switch to another financial institution in the next 12 months, typically seeking better digital experiences and no-fee banking. The implication for banks and credit unions is clear: invest in intuitive, mobile-first technology or risk losing the next generation of customers.

Credit, Control and Customization

Gen Z’s relationship with credit is pragmatic and evolving. Nearly half — 48% — would increase their use of a primary credit card if issuers offered better payment features. Flexible repayment plans, real-time spending insights, and the ability to set personal rules are top priorities. What’s driving this? Gen Z wants financial tools that “think like them, budget like them and even feel like them.” Credit cards are no longer just for borrowing — they’re platforms for personal finance management.

40% of millennials and 48% of Gen Z would boost card usage if they could choose repayment plans at the point of sale.

13% of consumers would use their primary cards more if issuers provided deeper usage insights; 12% want to pre-set spending limits.

The Paycheck-to-Paycheck Paradox

Despite their digital savvy, this generation faces acute financial pressures. The share of Gen Z consumers living paycheck to paycheck soared from 57% in January 2023 to 69% in January 2025, outpacing the general U.S. population. Notably, 34% of Gen Z cite splurging on nonessentials as a financial stressor, and 19% say it’s the top reason they live paycheck to paycheck.

Yet, paradoxically, Gen Z saves a slightly higher portion of their income — 9.8% — than other groups, reflecting a nuanced approach to money management.

Shopping and Spending: Thrift Is “Cool”

Gen Z’s shopping habits are shifting. In-store and eCommerce purchases by 18- to 24-year-olds declined 13% year-over-year between January and April 2025. Thrift is in vogue, with younger consumers finding creative ways to enjoy experiences without overspending.

45% of Gen Z shoppers prefer installment plans, with 30% using those offered by merchants or third parties and 15% from card issuers.

73% of Gen Z identifies as “reactors,” handling bills as they arise and frequently relying on credit, compared to “planners” who proactively manage cash flow.

What’s Next for Financial Institutions?

With Gen Z’s purchasing power projected to reach $12 trillion in five years and $84 trillion in assets by 2045, the stakes could not be higher. Banks, FinTechs and merchants must:

Prioritize instant payments and real-time account visibility.

Offer flexible, customizable credit products.

Build seamless, mobile-first banking ecosystems.

Deliver financial literacy and planning tools tailored to Gen Z’s unique needs.

Gen Z is not just a new customer segment. They are the architects of the digital economy’s next chapter. Financial institutions that adapt to their expectations for speed, transparency and control will win their loyalty — and their business — for decades to come.