Gen Z is leading adoption of new payments. Here’s how BNPL is being affected.

  • Gen Z's payment preferences are influencing retail technology adoption.
  • Offering flexible payment options can boost sales and customer loyalty.

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Gen Z is leading adoption of new payments. Here’s how BNPL is being affected.

The evolution in payment technologies and experiences is directly impacted by changes in consumer preferences, particularly among younger generations. To explore these changes and their potential impact on businesses, I spoke with Thomas Priore – CEO, Priority, a company specializing in integrated payments and banking solutions.

Thomas Priore – CEO, Priority

This interview covers several key areas of interest in the payment landscape. Priore shares his observations on Gen Z’s adoption of newer payment methods like buy now, pay later (BNPL) for smaller purchases. He also discusses how retailers and restaurants might benefit from offering flexible payment options, and examines the role of prepaid vouchers and online cash solutions in today’s market.

Additionally, the conversation touches on important considerations such as data security, implementation challenges for businesses adopting new payment technologies, and potential future developments in the field. Through this discussion, we aim to provide insights that may help businesses navigate the current payment ecosystem and prepare for upcoming trends.

BNPL and younger generations

What trends are you seeing in terms of Gen Z’s preferences and adoption of solutions like buy now, pay later (BNPL) for smaller ticket purchases?

Gen Z is increasingly embracing BNPL for smaller ticket items (70% use it for purchases of less than $100). That seems to be driven by BNPL’s ease of use, availability and attractiveness as an alternative to credit cards. Data shows nearly 32.8 million Gen Zers will use mobile wallets this year, and 43% of Gen Zers will use BNPL. Very few in this generation use physical cards.

As always, younger people lead the way in adopting new things. Gen Z’s payment preferences will continue to drive the way the merchant community invests in and adopts financial and POS technologies. Because of this, we believe it’s essential to understand the value this generation places on flexibility, security and transparency of financial transactions.

Flexibility and Control

BNPL is one example of a solution that offers payment plans tailored to individual preferences (for example, how often someone wants to make a payment). This flexibility also offers a way for buyers to budget their expenses and pay over time without incurring high interest rates associated with credit cards.And they get to take their purchases home immediately! BNPL is not your grandma’s layaway.


The Gen Z consumer wants strong security features in the financial products they use, like advanced identity and credit protection. Two-factor authentication, encryption and fraud detection are minimum requirements.

Transparency and Trust

Gen Z expects clear terms of engagement: no hidden fees or unexpected surprises in the fine print.

As the first truly digital-native generation, Gen Z values the seamless integration of new payment methods that are embedded directly in the apps and platforms they already use, and that offer benefits in line with their financial habits.

Evolving the checkout experience

For retailers and restaurants looking to cater to Gen Z customers, what are the key benefits of offering split payment or BNPL options at checkout? How can providing this flexibility improve customer loyalty and drive growth?

Increased Sales – As I said earlier, flexibility and options are key for Gen Z. Establishments that offer options like split payment and BNPL can significantly boost sales with this cohort. Data shows that half of Gen Z consumers will abandon their shopping carts if their preferred payment methods are unavailable.

Access to New Customers – BNPL makes higher-ticket items more accessible to Gen Z. Paying in installments provides financial flexibility, enabling more people in this generation to afford purchases they might have postponed or avoided.

Competitive Edge – In a competitive market, providing BNPL and split payment options helps retailers and restaurants differentiate themselves from their competitors. These flexible payment solutions appeal directly to Gen Z customers, who prioritize convenience and financial control. The lesson for business owners: it’s essential to meet the evolving expectations of younger consumers.

Improved Loyalty – Restaurants and retailers that implement mobile and self-checkout technology have a significant opportunity to enhance customer loyalty. The data collected from loyalty programs through mobile devices and kiosks allows merchants to execute targeted marketing and promotional campaigns, effectively boosting customer engagement and loyalty.

Payments bridging the digital and physical worlds

Prepaid vouchers and online cash solutions seem to bridge the digital and physical worlds. Can you explain the use cases and advantages of these payment methods for businesses?

The big advantage for businesses is that these methods reduce transaction costs versus traditional card acceptance. There are several ways businesses can leverage prepaid vouchers and online cash solutions:

  • Online Retail: These methods offer secure transactions, giving buyers peace of mind. This security builds trust between merchants and customers. Plus, integrating online cash solutions with existing tech makes payments smoother, boosting efficiency and customer satisfaction.
  • Financial Inclusion: Prepaid vouchers and online cash are great for young adults and those without access to traditional banking or credit cards. By offering these options, businesses can attract and keep customers who might otherwise be left out.
  • Security: These payment solutions come with strong security features like advanced encryption and authentication. This reduces fraud risk and addresses data privacy concerns, which, again, helps to build trust between merchants and consumers.

Security and privacy

Data security and privacy are major concerns with new payment technologies. What are best practices when it comes to protecting consumer information?

First and foremost, your security must exceed industry compliance standards. It’s not good enough to just meet the standard.

  • Start with a risk assessment. Begin by identifying potential vulnerabilities in your security infrastructure. This helps pinpoint areas needing improvement and ensures your current measures are effective before adding new protections.
  • Implement strong access controls and encryption/tokenization. Make sure only authorized users can access sensitive data by using robust access controls. Encrypt data both in transit and at rest to keep it secure from unauthorized access.
  • Continuous monitoring. Keep an eye on your systems to spot potential risks and anomalies early. Continuous monitoring helps you stay ahead of threats. Stand your post. Always watch and guard the walls because hackers are going 24/7, 365.
  • Have an incident response plan. Be prepared for security issues with a solid incident response plan. It should outline steps for containing, investigating and fixing any breaches quickly to minimize impact.

Working with legacy systems and legacy processes

What implementation challenges do businesses typically face when adopting alternative payment solutions, and how can they overcome these hurdles?

One of the biggest barriers is integrating these solutions with legacy systems. For small and mid-size companies, finding the right tech partners can be tough, especially without dedicated IT resources. To find the right partner, look for a company that’s been successfully doing this for a while (shameless plug for Priority). They’ll be able to help you move money, accelerate cash flow and generate working capital.

Another area is regulation and compliance. The regulatory environment is continuously shifting, and understanding and keeping up with this can be impossible if you’re also trying to run a business. Again, partnering with knowledgeable service providers who can stay up-to-date on current regulations or consulting legal experts can help businesses stay on top of regulatory compliance.

Consumer awareness is also key: If customers don’t know about the new payment options, they’ll stick to the old ways. Businesses can tackle this by educating their customers about the benefits and availability of these new payment solutions through customer support and marketing campaigns. This not only improves the customer experience but also boosts adoption. 

The evolving future of payments

Looking ahead, what game-changing payment innovations excite you the most, and how can businesses prepare to capitalize on emerging trends?

Gen Z is already shaking up the commerce and payment acceptance landscape with their push for alternative payment methods, modern wallets and the like. As they become the next wave of small business owners, you’ll see this adoption accelerate on the operator side.

To prepare, businesses should start embracing these new payment solutions, find good tech partners that support modern payment and banking solutions, and stay updated on current trends. I like to say that this will be an evolution – not a revolution: the shift away from legacy B2B payment systems will take time. By anticipating these shifts and adapting proactively, though, businesses can stay ahead and capitalize on these game-changing innovations.

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