With the lion’s share of Gen-Z heading into adulthood, they are quickly catching up to Millennials to become one of the largest consumer demographics. Having more internet literacy than their Millennial counterparts, their impact is becoming most evident in e-commerce and other online marketplaces that use payment processors.

How We Spend Money Online

First, it’s important to highlight general trends that exist regarding how we spend money online. As more people get online, more money than ever is coursing through the internet’s payment infrastructure. In some economies, like the UK, shoppers generally spend more online than they do in physical stores.

Businesses that offer entirely online digital services are contributing to this, best seen in sectors that offer entertainment like slots and games which have become more popular in the past decade. When online, businesses can operate more cost-effectively while advancing pro-consumer benefits such as easily integrated discounts and bonuses like free spins. Entertainment has largely migrated to internet-supported services, bringing a sophisticated and ever-evolving payment processing apparatus with it.

The Main Generational Differences

Quite predictably, convenience is important for both generations but more so for Gen-Z. Convenience is one of the biggest necessities when it comes to mainstream tech adoption and customer satisfaction, so payments should be consistently available and seamless. Any issues or hold-ups, especially if poorly communicated, will make a company lose business.

Gen-Z prioritize convenience more because, being the more internet literate, they can easily find alternative services if need be. As such, they expect the best online services to come to them with the best offers, having grown up on the internet while being bombarded by offers. On the flipside, Gen-Z are less likely to make accounts and have a pronounced increase in their debt balance – 25%. Alternative payment options like crypto are also more popular than with Millennials.

This speaks to a fluidity found within Gen-Z, where they are less likely to be captured by rigid business accounts and superficial brand loyalties when it comes to their money, which can and will be converted to other forms of payment if appropriate. Instead, their loyalty is awarded to the payment processors that are most convenient, particularly with buy now, pay later schemes. Unfortunately, this comes at the cost of literacy with traditional financial dogma like debt responsibility.

Millennials were more likely to create accounts and use credit, along with all the financial support available from some payment processors. While they also support the rise of buy now, pay later services, they believe that it should be more strictly regulated than their Gen-Z counterparts. This mirrors the Gen-Z fluidity online with rigidity in a dichotomy that you’d expect from older versus younger generations.

Gen-Z Is Changing The Internet

It’s not just about the money. Microsoft CEO Satya Nadella highlighted a shifting web search, largely attributed to generational differences and exacerbated by modern AI developments. For e-commerce, generative AI presents a great solution to some of the above differences in how Gen-Z interacts with online businesses.

For example, AI chatbots can solve the informative services that younger consumers demand, especially when something goes awry. It makes on-site, unobtrusive communication easier since it doesn’t demand the customer create an account to get their basic service standards met.

Guest checkout money is just as good, after all. Similarly, crypto adoption continues at a slow but steady pace. When it kicks into high gear, it’ll be online businesses like e-commerce that will be the first adopters.

When Gen-Z age into the largest consumer demographic, these are the kinds of changes that can be expected. By then, the newer generations will no doubt have demands of their own when it comes to online payment infrastructure, so it will be interesting to see if the trend for a more fluid and unobstructed experience holds.