Consumer Behavior

Gen Z leading the pay later movement

Photo: Adobe Stock

November 25, 2024

Gen Z is the leading cohort to prioritize using pay later options when it comes to personal purchases, entertainment and dining out this holiday season and 35% admit to overspending this year.

Those are findings from a Splitit survey, "Use of Card Installment Plans in Holiday Shopping," that polled 5,248 consumers, according to a press release.

"Gen Z has overextended themselves financially this year and given this cohort's well known price sensitivity, this is a notable trend," Nandan Sheth, CEO of Splitit, a payments provider said in the release. "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."

Additional findings include:

• Pay later will be used to rationalize splurge purchases: 44% of Gen Z use pay later options to rationalize large impulse purchases. In fact, 21% of shoppers overall will use pay later this holiday to make purchases out of their budgets.
• Consumers making more than $100k favor pay later options: 60% of respondents earning more than $100,000 have recently used a pay later solution, compared to 48% of those earning less than $50,000, challenging the view that pay later is mainly for lower income and credit-score consumers.