Nearly 1 in 5 Gen Z Turn to BNPL as Traditional Credit Plays a Smaller Role

Generation Z consumers are not only saving more; they’re reshaping how financial activity moves, stores and circulates online.

Their behavior is challenging long-standing assumptions in banking and payments. Their habits look familiar on the surface, yet the underlying rails look nothing like the systems used by older consumers.

The PYMNTS Intelligence report “Gen Z Financial Habits Put Debit, Wallets and Influencers in Charge” found that the youngest consumers are embracing a mix of digital wallets, debit-first spending and social-media-driven decision-making that is accelerating a shift toward mobile commerce.

The report showed how Gen Z balances traditional needs like savings and credit building with a strong pull toward digital instruments, marketplaces and creator recommendations. This combination is giving banks, issuers and FinTechs a clearer view of how the next decade of consumer financial behavior is likely to evolve. The change is already underway.

Key data points from the report:

Social channels have become a primary commerce rail for Gen Z, as 81% of them sometimes or often make purchases based on influencer recommendations. Only 28% of baby boomers do the same.

Marketplace convenience now shapes discovery and checkout, as 31% of Gen Z’s most recent retail purchases took place on Amazon, a share that rose to 41% among those earning $100,000 or more.

Over the past six months, 36% of Gen Z’s income was saved. They also stored 13% of those savings in digital wallets and 6.3% in cryptocurrency, more than any other generation. They save more. They store it differently.

Other findings in the report give banks and payments providers a more detailed picture of how Gen Z behaves at the point of sale and how they think about credit and financing. Debit remains the dominant choice at checkout, with 42% of Gen Z using debit for grocery purchases. Only 19% use credit cards at the grocery store, while 6% use Apple Pay, the highest share of any cohort. Their preference for tap-to-pay and mobile checkout is reshaping everyday spend patterns.

Gen Z’s approach to financing also reflects a turn to digital tools, as 18% of them use buy now, pay later (BNPL) products alongside other pay-later methods, compared with 12% of older consumers. Only 33% rely solely on credit cards for financing needs. By contrast, 43% of non-Gen Z consumers rely exclusively on credit cards. Credit use is not disappearing for Gen Z, but it is sharing space with newer instruments. That shift matters.

The generational gap in credit card ownership underscores why underwriting models may need to adjust. Just 55% of Gen Z consumers have a credit card, and their average monthly balance sits at $1,667, below the $1,959 held by older consumers. This thinner file profile affects credit building and rewards preferences. It signals an ecosystem where choice, convenience and speed matter more than legacy products tied to plastic cards.

The result is a consumer group that behaves in predictable ways at a high level but moves through the financial system in different ways at a granular level. Their shopping starts on mobile devices. Their savings flow into digital wallets and crypto. Their purchasing behavior is shaped by creators and marketplaces. These preferences will not reverse. They will intensify.

Banks and FinTechs that want to engage this generation may need to do more than modernize legacy tools. They may need to redesign the rails themselves.