The study highlights how Gen Z approaches flexible payment options. As many as 65% of Gen Z consumers decide to use credit card instalment plans before reaching the checkout stage, showing a trend toward planned spending. Regardless, 25% of respondents admitted they had not utilised split-payment plans simply because they were unaware of their availability.
“Gen Z has overextended themselves financially this year and given this cohort’s well known price sensitivity, this is a notable trend. As a result, many of these young adults are prioritizing where to spend their money this season and will rely on their favorite pay later options to finance personal splurges, including entertainment and dining out. Brands must offer flexible payment options this holiday in order to gain market share with the Gen Z consumer,” Nandan Sheth, CEO of Splitit.
Gen Z is the least likely demographic to use flexible payments for gifts, with only 60% opting for such methods, compared to 73% of Baby Boomers, 68% of Gen X, and 65% of Millennials. Yet, 44% of Gen Z revealed they plan to use pay-later methods to rationalise large, impulse purchases, mirroring a broader trend where 21% of shoppers across all demographics rely on these options for out-of-budget holiday buys.
Moreover, the report showed that Gen Z favours credit card instalment plans over traditional buy-now-pay-later (BNPL) services. As many as 46% of Gen Z increased their use of credit card instalments in the past year, the highest rate across all generations, compared to 41% of Millennials, 33% of Gen X, and 21% of Baby Boomers. Meanwhile, fewer than 44% of Gen Z respondents reported increasing their use of traditional BNPL methods.