While younger consumers — often considered digital natives — are highly engaged online, the gap between age groups’ eCommerce adoption is narrower than one might expect. Consumers in older generations are transacting online as much as anyone else, particularly in online retail and travel purchases.

Payment choice, meanwhile, varies considerably from the digital to the physical. In online spaces, credit cards and digital wallets are highly popular. In physical stores, debit cards maintain their dominance. These differences highlight the interplay between perceived security, budgeting priorities and the unique demands of each shopping channel.

Merchant preferences similarly depend on shopping channel. Retail giants Amazon and Walmart each hold a considerable lead in their respective channels, eCommerce and brick-and-mortar shopping. Notably, debit card users often gravitate toward value-focused retailers, reflecting the relationship between payment method choice and consumers’ overall priorities.

These are just some of the findings detailed in “How People Pay: Payment Choice Depends on Shopping Channel,” a PYMNTS Intelligence exclusive report. This edition examines eCommerce trends across generations and explores consumers’ shopping and payment preferences. The report draws on insights from a survey of 2,722 consumers conducted from Nov. 11, 2024, to Nov. 30, 2024.

eCommerce Adoption Rates Consistent Across Generations in Retail and Travel

Online shopping adoption has remained relatively consistent in the last year. Consumers are making online purchases at roughly the same rate as in November 2023. This trend can be seen across multiple key categories: grocery, restaurant, retail and travel. For example, the share of retail transactions consumers made online was 26% in both November 2023 and November 2024. This indicates that online shopping for these categories has stabilized rather than continued to grow.

The digital divide among age groups appears to be diminishing. With retail and travel purchases, online purchasing rates are relatively consistent across generations. For example, 27% of baby boomers and seniors and 25% of Generation X consumers made their last retail purchase online. These figures are quite similar to the 26% of millennials and 23% of Generation Z consumers who did the same. This suggests that generations universally embrace the convenience of eCommerce for certain purchases.

However, it is important to note that this trend of cross-generational eCommerce adoption does not apply to all categories. Gen Z and millennials are still considerably more inclined to make restaurant and grocery purchases online than older consumers. Gen Z consumers are 72% more likely to have made their last restaurant purchase online than baby boomers and seniors. Evidently, there are still some areas where digital native consumers are more comfortable transacting digitally than their older counterparts.

Consumers Prefer Debit Cards in Stores, Credit for eCommerce

Our survey data reveals clear disparities in consumer payment preferences when purchasing retail items in physical stores versus online. In stores, consumers favor debit cards, with 42% using a debit card for their last retail purchase. On the other side, just 28% used a credit card. In other words, consumers are 50% more likely to use debit cards than credit cards in physical retail locations.

However, these preferences reverse when consumers shop for retail products online. On digital channels, shoppers favor credit cards over debit. While 38% of consumers used credit cards to pay for their last online retail transaction, just 30% used debit. This makes consumers 27% more likely to use credit than debit for online retail shopping.

One possible explanation for this difference in payment preferences by shopping channel could be that consumers’ security concerns may feel all the more pressing in the digital world, where cyberfraud threats loom large. Shoppers may feel that debit cards, a direct gateway to their bank accounts, are riskier online, where PIN entry is not an option. Meanwhile, they may feel more secure using credit cards online, with their added fraud protection and separation from personal funds. This perception could drive consumers to rely more on credit for eCommerce.

Consumers use digital wallets more frequently online than they do in stores. In fact, they are twice as likely to use digital wallets online for retail purchases than in brick-and-mortar locations. Specifically, just 8% of consumers used a digital wallet for their last retail purchase in stores, compared to 16% online. This suggests that consumers may see digital wallets as more secure, convenient or easier to use when making online purchases.

Shoppers Overwhelmingly Choose Amazon When Purchasing Online and Walmart In-Store

The data reveals a clear split in consumers’ merchant choice preferences based on shopping channels and payment methods. Amazon dominates the online retail space despite Walmart’s best efforts to capture more eCommerce market share in the last few years. Fifty-three percent of shoppers who used credit cards for their last online retail transaction made the purchase through Amazon. Plus, 44% of those who used debit cards did the same.

However, the findings reveal notable differences in where consumers shop online when they do not choose Amazon. For example, online debit shoppers are more than four times more likely to purchase from Walmart than those paying with credit cards. Specifically, 17% of online debit users made their last purchase at Walmart, compared to just 4% of credit users. Online credit card users, meanwhile, were twice as likely as debit users to shop at Temu.

With brick-and-mortar shopping, Walmart reigns supreme, capturing 23% of in-store debit shoppers and 15% of in-store credit shoppers. A key difference emerges, however, when looking at the second most popular in-store shopping destinations. Discount retailers such as dollar stores draw in-store debit shoppers, with 7% making their last purchase there.

Meanwhile, dollar stores are not in the top five destinations for credit users. Instead, Target is the second-most popular place for in-store credit users. However, at 6%, in-store credit users are not much more likely to pick Target than debit users, at 5%.

Debit users exhibit a stronger preference for value-driven retailers. They disproportionately choose Walmart for eCommerce and dollar stores for brick-and-mortar shopping. This suggests that these consumers especially focus on affordability. This finding resonates with previous PYMNTS Intelligence research revealing that debit users often choose the payment method for budgeting reasons.

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Methodology

“How People Pay: Payment Choice Depends on Shopping Channel,” a PYMNTS Intelligence exclusive report, is based on a survey of 2,722 U.S. consumers conducted from Nov. 11, 2024, to Nov. 30, 2024. The report explores eCommerce trends across generations and examines consumers’ shopping and payment preferences. Our sample was balanced to reflect the U.S. adult population across key demographic variables: 51% of respondents identified as female, and 30% reported annual incomes between $50,000 and $100,000.