New research from NMI, a global leader in embedded payments infrastructure, reveals that seamless checkout experiences are fundamentally reshaping consumer spending behavior across generations. The company’s “Psychology of Payments” survey of 1,000 U.S. adults found that 50% of consumers shop more frequently when payments feel seamless, while an equal 50% abandon their carts when checkout feels complicated or frustrating.
Frictionless Checkout Drives More Spending
The data makes a clear case for investing in seamless payment experiences. Key findings include:
- 52% of consumers say perks like gamified loyalty programs, cashback offers, and BNPL rewards make them shop online more frequently, rising to 72% among Gen Z and 67% for parents with kids under 25
- 52% prefer secure one click online checkout over slower in-person cashier interactions, climbing to 61% for busy parents
- 48% say they spend more at checkout when the process is fast and frictionless
- 48% of consumers overall, and nearly 63% of Gen Z, say the digitalization of payments has significantly changed how they approach spending
A Generational Divide in Payment Preferences
Physical credit and debit cards still dominate overall, but younger consumers are accelerating fast toward digital-first behaviors. 29% of Gen Z prefer digital wallets for both in-store and online purchases, compared to 18% of Millennials, 5% of Gen X, and just 2% of Baby Boomers.
Yet digital natives are not entirely abandoning traditional spending guardrails. 51% of Gen Z say they use debit cards to avoid carrying a hefty credit balance, and 17% use cash to limit spending to what they physically have on hand. The youngest consumers are simultaneously embracing digital speed and seeking guardrails against overspending.
The SMB Gap Is Growing
Peter Galvin, Chief Growth Officer at NMI, said, “This study confirms what we’re seeing across our platform: frictionless payments increase conversion rates, raise average order value and strengthen loyalty. Yet, many small businesses are falling behind; 40% of SMBs still don’t accept digital wallets and nearly half 47% lack an ecommerce presence. As consumer expectations evolve, that gap becomes harder to close.”
Convenience Is Blurring Financial Awareness
The research also points to a growing tension between convenience and financial literacy. 37% of Gen Z admit they have spent more at checkout without realizing it, compared to 22% of respondents overall. More than a third (35%) of Gen Z say they have used BNPL options specifically to make purchases feel less “real,” while 49% have relied on BNPL to make purchases they could not afford upfront, compared to just 12% of Baby Boomers.
A striking 88% of respondents, including 92% of Baby Boomers, say teaching financial literacy has never been more critical. Galvin added, “The opportunity for fintechs is to embed transparency, financial tools and real time insights directly into the payment experience. When financial awareness evolves alongside convenience, digital payments can reinforce healthy habits and encourage smarter spending.”
