Turns out Gen Z don’t just march to the beat of their own playlist — they’re also swiping to their own financial rhythm. New research from PayPal’s 2025 eCommerce Index has revealed a massive generational shift in the way Aussies are paying for their online shopping sprees. And if you thought credit cards were the go-to, think again.
More than one in three Australians (37%) have used a Buy Now, Pay Later (BNPL) service in the past six months, a jump of 11% compared to last year. But the biggest surprise? Gen Z are officially leading the charge. For the first time, more Gen Z shoppers are checking out with BNPL (38%) than credit cards (32%). Yep, the youngest generation of adult consumers are saying “credit, who?” and choosing flexibility instead of interest.
PayPal’s own BNPL offering, PayPal Pay in 4, has had a particularly big year, growing its customer base by 13% and now used by more than half (51%) of BNPL shoppers in Australia. That’s a lot of Aussies splitting their payments into bite-sized chunks and keeping their budgets — and bank balances — in check.
The Generation Leading the BNPL Boom
While Millennials remain the biggest BNPL users overall (53%), it’s Gen Z who are setting the trends and redefining how we pay. They’re not only choosing BNPL more often, they’re also spending the most — averaging $111 per transaction, ahead of Millennials ($102), Gen X ($99) and Boomers ($93). On top of that, they’re using BNPL more frequently too, clocking in at 3.1 transactions per month on average.
So what’s driving this shift? It’s not that Gen Z are reckless spenders. In fact, the data paints the opposite picture. They’re practical, digitally savvy, and prefer payment methods that give them transparency and control. A huge 81% still use debit cards online, showing they’re steering away from traditional credit and interest fees in favour of flexible, interest-free options like Pay in 4.
“It’s clear Gen Z want flexibility and choice at checkout, which is why PayPal Pay in 4 — with no late fees or interest — is striking such a chord with younger consumers and reshaping how Australians pay online,” says Andrew Toon, General Manager of PayPal Australia’s payments business.
A Budget Lifeline in a Cost-of-Living Crunch
It’s not just the younger generations getting behind BNPL either. Aussies across the board are finding it a handy tool to manage household budgets and stretch their dollars a little further — something that’s especially appealing during today’s cost-of-living pressures.
According to PayPal’s research, 65% of BNPL users say they use it to spread out the cost of larger purchases, while just over half (51%) say it helps them manage their budget and cashflow. Nearly half (48%) believe BNPL gives them more flexibility than other forms of credit, and 42% find the repayments easier to manage.
In short, Australians aren’t just chasing convenience — they’re chasing control. And as Mr Toon explains, that’s a big part of why PayPal’s own BNPL offering continues to rise. “BNPL use is growing in Australia, not just because it’s convenient, but because it gives people real flexibility at a time when managing everyday costs matters more than ever,” he says.
Shop Smart, Win Big
If you needed another reason to give BNPL a go, PayPal’s throwing in a little extra incentive. From November 4, PayPal Pay in 4 customers will have the chance to win one of 500 cash prizes worth $1,000 each — that’s a total prize pool of half a million dollars.
To enter, customers just need to follow @PayPalAU on Instagram, drop a blue heart emoji on the weekly post, make at least one Pay in 4 purchase during that week, and DM their PayPal email. Each week, 100 winners will be randomly drawn and receive $1,000 straight into their PayPal account. Not a bad reward for doing what you were already going to do — shop.
So, whether you’re snagging summer fashion, pre-ordering the latest tech, or just treating yourself to a cheeky online haul, it’s clear Aussies are saying a firm goodbye to traditional credit and hello to interest-free flexibility. And if Gen Z have anything to say about it, the future of finance is looking a lot more buy-now than pay-later.