Gen Z Digital Wallet Use Climbs 21% as Budgets Tighten

Financial stress is doing more than pushing consumers to hunt for lower prices. It is also changing how they organize purchases, where they shop and which payment tools they trust most when money feels tight.

That is the broad takeaway from “The New Checkout: Crimped Consumers Lean Into Online Retail and Digital Wallets,” a  PYMNTS Intelligence report based on a survey of 2,108 U.S. adults. The study finds that pressure on household budgets is steering many shoppers toward online retail, value-focused merchants and digital wallets that offer budgeting help and access to installment plans.

The report also suggests that this shift is especially pronounced among younger consumers and parents, two groups feeling a sharper rise in strain than the general population.

In addition, payment choice is starting to reflect household strain in a more direct way. Consumers under high financial stress are more than twice as likely as low-stress consumers to have used digital wallets for their last grocery purchase, at 21% versus 8%, and for their last retail purchase, at 28% versus 11%. That matters because digital wallets are no longer just about speed at checkout. For many consumers, they are becoming a tool for managing cash flow, tracking spending and tapping installment credit at the moment of purchase.

The shift also carries a more constructive signal for merchants and payments players. Consumers are still spending. They are just doing it more carefully. High-stress shoppers spent an average of $109 on their last grocery purchase and $111 on their last retail transaction, compared with $95 and $88 for low-stress consumers. The report suggests these households may be consolidating purchases, planning more deliberately and using digital channels to control costs, reduce trips and capture promotions.

Merchant choice shows the same pattern. Walmart appears to be gaining ground with financially strained consumers across grocery channels, while Dollar Tree is attracting more stressed in-store retail shoppers. In online retail, the report finds that high-stress consumers are 34% less likely to buy from Amazon than their low-stress counterparts, while being nearly three times as likely to buy from Target. Those findings suggest consumers are actively sorting retailers by perceived value, not simply cutting back across the board. They are making tradeoffs.

There is also a generational angle worth watching. Financial stress rose only 3 percentage points overall between March 2024 and November 2025, but it jumped 12 points among Generation Z, 8 points among millennials and 9 points among parents with children at home. At the same time, digital wallet use for the last retail purchase climbed 50% overall, rising to 15% in November from 10% in March 2024. Among Gen Z, it more than doubled to 36% from 15%. The payment habits taking shape under pressure today could stick tomorrow. That is the opening.

17% of consumers reported cash shortfalls for living expenses or emergencies in the last 90 days, a marker the report uses for high financial stress.

28% of high-stress consumers used a digital wallet for their last retail purchase, versus 11% of low-stress consumers.

36% of Gen Z consumers used a digital wallet for their last retail purchase in November, up from 15% in March 2024.

Even under pressure, consumers are finding ways to adapt. They are using digital tools to budget, turning to merchants they see as dependable on price and making more deliberate purchasing choices. For merchants, banks and payments companies, that creates a clear opening: build checkout experiences around control, visibility and flexibility.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.