The Green Sheet Online Edition
November 10, 2025 • 25:11:01
Why flexible payments are key to customer loyalty this holiday season
According to PWC's Holiday Outlook 2025, 84 percent of U.S. consumers expect to cut back on spending in the next six months, marking the slowest U.S. holiday sales growth since the pandemic (see bit.ly/3XhTRSN). For merchants, this means the point of sale has become a moment of truth.
Discounts and promotions can draw customers in, but they don't guarantee conversion. As shoppers deliberately weigh every purchase, a missing payment option or checkout hiccup can be all it takes to trigger an abandoned cart.
In a cautious spending climate, merchants' differentiator isn't their inventory; it's whether customers feel confident completing the transaction. Flexible, intuitive payment options can keep sales moving and loyalty intact this holiday season.
When budgets tighten, payments evolve
Economic slowdowns have historically influenced how consumers pay. Layaway plans emerged during the Great Depression, allowing shoppers to pay for items in installments before taking them home. They resurfaced during the Great Recession, once again helping families stretch budgets while retailers kept revenue flowing.
A similar shift is happening today with the rise of Buy Now, Pay Later (BNPL). Like layaway for the digital age, BNPL allows consumers to pay over time — an attractive option for younger shoppers navigating a softening job market and rising inflation. In 2024, 54 percent of Gen Z reported using BNPL during the holiday shopping season, while only 50 percent said they used credit cards (see bit.ly/4nIGFkQ).
Likewise, a study by the CFPB found that BNPL purchases represent 28 percent of total unsecured consumer debt held by 18- to 24-year-olds, compared to 17 percent among borrowers of all age groups.
It's tempting to dismiss BNPL as a passing trend, but meaningful psychology is at play: financially stressed shoppers want more control. When every purchase feels significant, the ability to split payments or use a digital wallet balance can be the difference between hitting "buy" or walking away.
The question all merchants should be asking this season is simple: Can your customers pay the way they want?
Three strategies to make payments a competitive advantage
Even amid economic uncertainty, merchants can shape buyer behavior. Strategic improvements to the payment experience can boost conversions and reduce cart abandonment. Here's how merchants can drive sales and customer loyalty:
- Give shoppers the power of choice: Don't ignore buyers' preferences by defaulting to familiar payment offerings. Gen Z is up to three times more likely to use an alternative payment method, like contactless payments, payment apps, and BNPL, than baby boomers, Gen X and millennials (see bit.ly/47ut8IN). By avoiding a one-size-fits-all approach, you can capture revenue that would otherwise be left on the table.
For example, the ability to pay by digital wallet allows users to use funds that might sit idle in Venmo or PayPal, potentially boosting their willingness to buy. Similarly, interest-free credit options may help budget-conscious families move forward with higher-priced purchases.
A strong payments partner can help you offer the right mix of payment options without adding complexity, giving you flexibility to engage with more customers.
- Surface payment options early in the buyer journey: Alternative payment methods only matter if customers know they're available. When shoppers are aware of BNPL or other financing tools as they browse, it can influence how they evaluate affordability.
Audit your customer journey to assess whether you're losing potential sales before shoppers ever tap "add to cart." Does your website clearly state the payment methods you accept? From there, identify opportunities to showcase options earlier in the buyer journey, like banners on product pages advertising the option to "Pay in 4." Ensure visibility extends throughout the funnel, from homepage to checkout confirmation.
This awareness is particularly critical for holiday shoppers balancing gift purchases with other essential expenses. Regardless of which payment method a customer ultimately chooses, understanding their options helps them navigate the buying process confidently and incentivizes them to shop with you again in the future.
- Streamline the checkout experience: Payment variety is crucial, but so is the ease of completing a transaction. A clunky checkout flow, like requiring customers to re-enter payment details, can drive buyers away.
Take stock of your payment flow for friction points. For example, letting digital wallets auto populate stored details and enabling one-click payments at the point of purchase can get shoppers to the checkout finish line faster.
Equally important is ensuring omnichannel consistency with tokenization. Let's say a customer previously made an in-store purchase with their card. When that customer visits your ecommerce site, tokenization allows them to use the same card for a card-not-present transaction, without needing to re-enter their details.
By replacing sensitive payment information with a unique digital token that can be recognized across channels, tokenization makes the final step to purchase faster, safer and more convenient.
Optimize payments to maximize opportunity
This year, the biggest decision for many consumers may not be what to buy, but whether to buy at all. For merchants, that means payments must be an asset, not a point of friction.
By offering diverse payment methods, clearly communicating payment options, and delivering a frictionless checkout experience, you position yourself to convert hesitant buyers. And while this holiday season may be the immediate test, a flexible payments experience positions you to maintain loyalty long-term. 
As chief transformation officer at Stax Payments, Adam Gray is a pivotal operational leader focused on fostering profitable growth and increasing enterprise value. His key responsibilities include overseeing mergers & acquisitions, business transformation, and steering Stax Bill, the company’s Canadian-based invoicing and recurring payments business. Contact him via LinkedIn at
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