Online Retailers Losing Gen Z Over Digital Wallets
A recent study highlights how online retailers missing preferred digital wallet options are struggling to retain Gen Z shoppers who walk away from checkout.
Radwan AbdulhadiEditor and technology writer
The Checkout Abandonment Crisis
Online shoppers frequently browse e-commerce sites, fill their carts, and head to checkout, only to abandon the purchase if their preferred payment method is unavailable. This trend is particularly pronounced among younger demographics, according to a recent study from global data and analytics platform PYMNTS Intelligence, which notes that online retailers lacking digital wallet options are actively losing profit.
More than one-third, or 36 percent, of Gen Z shoppers abandoned a cart in the last 30 days because they could not pay the way they wanted. This figure represents 1.7 times the overall average, followed closely by millennials at 31 percent. Combined, 40 million consumers across these two age groups walked away from intended purchases in a single month.
Growing Spending Power and Digital Wallet Adoption
With Gen Z's spending power expected to grow to $12 trillion by 2030, retailers risk alienating a vital demographic if they fail to expand their online payment options. Digital wallets like Apple Pay and Google Pay have quickly become mainstream, accounting for 40 percent of online purchases in 2025 and 17 percent of in-store spending, according to a study from payment technology firm Global Payments.
Furthermore, PYMNTS found that 87 million consumers, representing one-third of US shoppers, used a digital wallet online in the prior 30 days. Gen Z leads this shift as the most likely demographic to use digital wallets at 47 percent, closely followed by millennials at 44 percent.
Financial Pressures and Short-Term Financing
Economic factors heavily influence consumer behavior. Financial precarity plays a major role, with 29 percent of consumers living paycheck to paycheck and struggling to pay bills abandoning a cart when their preferred payment method was missing. This rate is nearly triple that of consumers who do not live paycheck to paycheck.
This issue is acute for Gen Z, which has a current unemployment rate of 8.3 percent—double the national average. Additionally, 42 percent of Gen Z individuals live paycheck to paycheck while trying to navigate the high cost of living in the US.
The Rise of Buy Now, Pay Later Services
Faced with financial pressure, young consumers increasingly lean toward Buy Now, Pay Later (BNPL) services integrated into online wallets. These short-term financing options allow users to make a down payment and split the remaining balance into subsequent payments.
The PYMNTS study highlighted that millions of customers abandoned purchases due to missing options like PayPal, with PayPal Pay Later proving more popular than other leading alternatives such as Klarna.
The Cost of Inaction for Retailers
Ultimately, missing digital wallet options directly translates to lost revenue. Across all digital wallet users, 33 percent stated they would have delayed a purchase, switched merchants, or skipped it altogether if their preferred wallet had not been accepted. That sentiment is even stronger among Gen Z shoppers, nearly half of whom reported changing merchants or abandoning transactions entirely.
As total spending via digital wallets in the US is expected to reach $4.1 trillion by 2030—marking a 64 percent increase from 2025—companies that fail to adapt risk being left behind in a rapidly evolving market landscape.
Sources
- EngadgetOnline retailers that don't support digital wallets are losing Gen Z customers
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