The future of payment technologies and consumer trends are exploding; GenZ’s are more tuned to flexible, and reliable payment sources. The market is evolving with the needs of this generation and adapting new business models and technologies to meet the evolving demands of younger generations. Let’s understand what and how new payment preferences are changing traditional methods of payments.
The Rise of BNPL
Buy Now, Pay Later (BNPL) has become a favored payment method for Gen Z, particularly for smaller purchases under $100, nearly 43 per cent of Gen Z will use BNPL, appreciating its ease of use and ability to budget expenses without incurring high credit card interest rates. This generation's preference for flexible, secure, and transparent financial transactions is driving merchants to adopt modern payment technologies, said Thomas Priore, CEO of Priority, in a recent conversation with Tearsheet.
Benefits for Retailers and Restaurants
For businesses, offering BNPL and other flexible payment options can lead to increased sales and improved customer loyalty. Data shows that half of Gen Z consumers abandon shopping carts if their preferred payment methods aren’t available. Providing these options not only boosts sales but also attracts new customers and gives businesses a competitive edge.
Prepaid vouchers and online cash solutions offer secure transactions and reduce costs compared to traditional card payments. These methods are particularly beneficial for financial inclusion, catering to young adults and those without traditional banking access. They also enhance security, reducing fraud risk and building trust between merchants and consumers.
Data security remains a top priority with new payment technologies. Priore emphasized the importance of exceeding industry compliance standards, conducting risk assessments, implementing strong access controls and encryption, continuous monitoring, and having a robust incident response plan.
Challenges and Solutions in Implementation
Integrating new payment solutions with legacy systems is a common challenge. Businesses, especially small and mid-sized ones, should seek experienced tech partners to navigate this transition. Staying up-to-date with regulatory changes and educating consumers about new payment options are also crucial steps for successful implementation.
Looking Ahead
As Gen Z continues to influence commerce, the adoption of alternative payment methods and modern wallets will accelerate. Priore advises businesses to embrace these new solutions, partner with supportive tech companies, and stay informed about emerging trends. This proactive approach will help businesses stay competitive and capitalize on future innovations in the payment landscape.
