Business Bayani PH

As Generation Z establishes itself in the workforce, their growing purchasing power is reshaping the landscape of fintech within e-commerce. With an eye on this evolving trend, merchants are gearing up for the 2024 retail challenge: satisfying Gen Z’s demand for diverse payment options.

Payment gateway service provider Network Merchants Inc. (NMI), in an interview at E-Commerce Times, said they are at the forefront of this retail revolution. According to Peter Galvin, NMI’s chief growth officer, catering to Gen Z’s preferences for innovative payment technologies is crucial for merchants looking to stay relevant and avoid losing a generation of consumers.

Gen Z individuals are actively spending both online and in physical stores. Galvin emphasized that to retain their business, merchants need to provide a range of payment options that cater to the diverse preferences of these consumers. 

Understanding the Shift in Consumer Behavior

Born between 1997 and 2012, Gen Z, currently comprising the 18- to 26-year-old adult consumer group, exhibits fundamental differences in purchasing and banking behaviors compared to older generations. Zillennials, born from roughly 1993 to 1998, share similar traits, forming a significant buying force.

Younger consumers, whether Gen Z or Zillennials, favor efficiency in their transactions. Tasks like updating addresses, managing credit cards, or disputing transactions must be quick, easy, and automated. Many of them don’t carry cash or physical cards, relying heavily on mobile payments.

Merchants Must Adapt Quickly

To meet Gen Z’s expectations, merchants need to embrace embedded payments. NMI’s modular payment gateway platform provides merchants with integration and processing options tailored to their customers’ needs. This approach allows businesses to swiftly adopt new payment technologies, showcasing adaptability and responsiveness.

Galvin stressed that payments are a crucial function for both brick-and-mortar stores and online storefronts. For younger consumers, payments represent the most tech-centric aspect of physical stores, making it a critical area for merchants to focus on.

Fintech’s Role in E-Commerce Growth

The rise of e-commerce and online shopping doesn’t diminish the importance of in-store purchases for younger consumers. Modern money tools, such as digital wallets and biometric payment methods, play a vital role in enhancing the overall payment experience, encouraging more in-store transactions.

Fintech, short for financial technology, has become indispensable for e-commerce growth. Secure payment platforms and digital wallets have transformed payment processes, enabling e-commerce businesses to offer advanced payment and refund options globally.

In his interview, Galvin highlighted the necessity for merchants, independent software vendors (ISVs), and independent sales organizations (ISOs) to collaborate. Together, they can equip their payment systems to handle the evolving landscape of payments, whether in-store, online, or on mobile devices.

Buy Now, Pay Later: A Preferred Option

NMI’s recent data reveals that 83% of Gen Z consumers are eager to try new payment methods. Buy Now, Pay Later (BNPL) services remain a preferred choice, with two in three consumers using them at least half of the time when shopping online.

Galvin emphasized that offering BNPL options is crucial, as it enhances brand loyalty and keeps Gen Z consumers coming back. Despite the potential benefits, implementing multiple payment options can be costly and time-consuming for businesses, potentially discouraging completion and leaving them at a disadvantage compared to competitors.

Embedded Payments: The Swift Solution

Galvin’s advice for merchants looking to quickly adopt new payment technologies is clear: leverage embedded payments. By integrating payments into their existing software management stacks, merchants can seamlessly add new payment methods like digital wallets without leaving their native systems.

As Gen Z holds in-store payment technology to a higher standard, merchants must prioritize meeting their expectations. Failure to offer preferred payment options may lead to these consumers taking their business elsewhere, making embedded payments a strategic imperative for merchants in 2024 and beyond.◼