Americans have moved beyond “just trying mobile payments”. They’re doing it without thinking according to EMARKETER’s March 2026 report.
US proximity mobile payment transaction value will reach $985.7 billion in 2026 and cross the $1 trillion threshold in 2027 („US Proximity Mobile Payments Forecast,“ March 2026). And spending growth is consistently outpacing user growth by double digits.
In 2023, transaction value grew 26.9% while users grew just 6.7% — a 20-percentage-point gap („US Proximity Mobile Payments Forecast,“ March 2026.). Even by 2029, when both curves flatten, the gap persists at over 5 points.
People who already use mobile payments are spending dramatically more through them each year.
Average annual spend per user has climbed from $4,353 in 2022 to an estimated $7,888 in 2026, and will hit $9,701 by 2029. Marking an increase of 2.2x. That growth compounds at 12.1% annually, roughly three to four times the rate of inflation. People are choosing to route more of their spending through mobile payments.
Mobile proximity payments — tap-to-pay at the point of sale — have crossed the line from behavior to habit.
And the generation powering that shift changes what the market has to build next.
Gen Z Becomes the Largest Mobile Proximity Payment Cohort in 2027
Gen Z is about to become the largest proximity mobile payment user group in the United States. EMARKETER projections show Gen Z reaching 43.1 million users in 2026, closing fast on millennials at 45.8 million. By 2027, Gen Z overtakes them — 47.3 million versus 46.3 million — and the gap widens to more than 8 million users by 2029 („US Proximity Mobile Payment Users and Penetration,“ 2026).
Gen Z proximity mobile payment penetration among smartphone users will climb from 48% in 2022 to over 77% by 2029, reaching 82% by 2030.
Millennial penetration is essentially plateaued in the low-to-mid 60s. Gen X hovers around 41-42% and is barely moving. The next phase of mobile payment growth is increasingly about Gen Z entering its prime spending years.
The phone-first validation pattern — checking reviews, asking friends, seeking social proof before buying — is unlikely to fade simply with age. It’s how a generation raised on social media makes purchase decisions. As their spending power grows, the pattern intensifies rather than moderates. Millennials didn’t stop Googling products when they turned 30. Gen Z won’t stop checking TikTok when they turn 25.
Gen Z doesn’t just pay differently. They shop differently. And the gap between how they shop and how merchants serve them is where the real opportunity — and the real problem — lives.
The Gen Z Path to Purchase Is Physical and Digital at Once
EMARKETER’s Gen Z Path to Purchase 2025 report, based on a June 2025 survey, reveals a shopping pattern that breaks traditional funnel assumptions.
Despite being the most digitally native generation, Gen Z still discovers new brands and products in physical stores at rates that match or exceed social media („Gen Z Path to Purchase,“ Droesch, 2025). Physical stores are the top purchase destination in 6 out of 10 product categories surveyed („Gen Z Path to Purchase,“ Droesch, 2025). Nearly 85% of Gen Z shoppers bought clothing in a physical store in the past six months. For food and beverage, it’s 91% („Gen Z Path to Purchase,“ Droesch, 2025).
These patterns are not isolated to one survey. A 2023 ICSC study of over 1,000 Gen Z consumers found that 97% shop at brick-and-mortar stores, while 85% say social media influences their purchase decisions („The Rise of the Gen Z Consumer,“ 2023). That separate signal reinforces the same physical-digital tension: this cohort shops in stores, but digital influence is always in the room.
Gen Z isn’t abandoning physical retail. They’re everywhere.
But their behavior inside the store is fundamentally different from every generation before them. When Gen Z discovers a product in-store, they are significantly less likely to make an impulse purchase. Instead, they pull out their phone, look the product up on social media, check reviews, ask friends, and seek validation before buying („Gen Z Path to Purchase,“ Droesch, 2025.). After in-store discovery, Gen Z is more likely than older shoppers to turn to social media for research rather than buy on the spot („Gen Z Path to Purchase,“ Droesch, 2025.).
And the reverse is equally true. When Gen Z discovers a brand on social media, predominantly TikTok followed by Instagram, their next move is frequently to visit a physical store that carries the product („Gen Z Path to Purchase,“ Droesch, 2025.).
The path to purchase is a loop: physical to digital, digital to physical, with the phone as the constant mediator. Gen Z walks into a store, discovers a product, and reaches for their phone. They see something on TikTok and walk into a store to touch it.
That is good news for physical retail. But it exposes a critical problem.
Merchants Lose the Shopper at the Moment of Decision
Right now, the moment a Gen Z shopper pulls out their phone inside a store is where the merchant starts losing control of the experience.
The shopper is standing in front of the product. They’re interested. But instead of buying, they open TikTok, text a friend, or search a competitor’s website. The merchant often has no mechanism to stay in that conversation. Without a frictionless, opt-in proximity trigger, they cannot deliver the social proof, reviews, personalized offer, or product information that would keep the shopper engaged right there, in the aisle, on the device they’re already holding.
Traditional in-store marketing tools weren’t designed for this. The Gen Z Path to Purchase data shows that Gen Z shoppers rely less on in-store displays and signage than older generations for discovery („Gen Z Path to Purchase,“ Droesch, 2025.). Screens and shelf talkers may still create awareness, but they are weaker tools for the phone-mediated validation moment. And QR codes, while functional, add friction at exactly the wrong time: the shopper has to notice the code, open their camera, scan, wait for the page to load, and then engage. That’s five steps inserted into a moment where the shopper is already halfway to leaving your ecosystem.
The same gap exists on the measurement side. If a shopper discovers a product on your in-store screen, pulls out their phone, leaves, and comes back to buy three days later, what drove that conversion? You can’t say. The digital side of the loop — the part that happens on the phone, in the store — is invisible to the merchant.
This is the documented behavior of the fastest-growing mobile payment user cohort in the country: 43 million users in 2026, 47 million in 2027, spending an increasing share of the approaching $1 trillion in proximity mobile payments.
Three Audiences Feel the Same Gap Differently
Picture the same shopper in three systems at once. The merchant sees a store visit. The media operator sees a screen impression. The payment platform sees a transaction. None of them can see the consideration moment happening on the phone in the aisle.
The broken handoff manifests differently depending on where you sit in the ecosystem, but the root cause is the same: there is no widely adopted, opt-in proximity layer connecting the physical environment to the shopper’s phone at the moment of engagement.
For Merchants with Apps and Physical Stores
You’ve invested in a mobile app. Your customers have it on their phones. But the app goes dormant the moment they walk through the door, even though the phone is the device they’re actively using to make purchase decisions. The app can’t respond to where the shopper is standing, what they’re looking at, or what content would keep them from leaving the aisle to research elsewhere. In a global retail technology survey cited by EMARKETER, just 6% of Gen Zers and millennials said they do not use retail apps at all („Digital and in-store tech are key to Gen Z loyalty,“ Haiss, 2026.) — but there is still a gap between the app and the in-store experience.
The pain is specific: every shopper who walks out to “do research” on their phone is a conversion you may never recover. And you can’t size the loss because you can’t see the dropout.
The first question to answer: can your app respond to where the shopper is in the store right now, or does it only know they opened it?
For Retail Media and Digital Signage Operators
You’re selling brands on the promise of in-store attention, but you can’t prove engagement beyond “a screen was on.” Brands are demanding the same attribution they get from digital advertising: exposure to engagement to transaction. Without that proof, in-store retail media remains undervalued. The data supports this: proximity mobile payments already represent 12.8% of in-store retail and food services transaction value in 2026, heading toward 14.1% in 2027 („US Proximity Mobile Payments Forecast,“ March 2026.). The money is increasingly flowing through phones at the point of sale. But the advertising that influences those transactions has no measurement infrastructure connecting screen to phone to purchase.
The pain is existential: you cannot scale your retail media revenue without solving the measurement gap between the screen on the wall and the phone in the shopper’s hand.
The first question to answer: can your signage react to the phone in the shopper’s hand, or is it still broadcasting to whoever walks by?
For Consumer-Facing Payment and Commerce Platforms
You’re competing for a share of the growing mobile payments market, but the battleground is shifting. User growth is decelerating, from nearly 8% in 2022 to around 4% by 2029 („US Proximity Mobile Payments Forecast,“ March 2026.). The next phase of competition isn’t about acquiring users. It’s about deepening engagement and capturing a larger share of each user’s spend. That means being present not just at the moment of payment, but during the discovery and consideration phases that now happen in physical spaces. The platform that can connect a Gen Z shopper’s in-store experience to their phone — seamlessly, privately, without friction — gains an engagement advantage that compounds with every transaction.
The pain is competitive: if your platform only activates at the payment terminal, you’re missing the shopping journey that happens before the tap.
The first question to answer: are you present during discovery and consideration, or only at the tap?
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Across all three segments, the prize is the same: a proximity layer that connects the physical environment to the shopper’s phone at the moment of engagement. The missing layer is not proximity in the abstract. It is proximity that is opt-in, in-context, measurable, and trusted.
In retail demos and partner conversations, the design pattern is clear: when proximity is tied to an active app moment, such as scan-and-go or a shelf interaction, the phone can become the in-store engagement layer instead of the exit ramp.
But building that layer is harder than it looks.
Gen Z Will Walk Out If They Feel Monitored
There’s a reason this gap hasn’t been closed yet. The obvious solutions all run into the Gen Z privacy test.
EMARKETER, citing SOTI’s Retail Tech Assessment, reports that 60% of Gen Zers do not object to retailer AI as long as the shopping experience is personalized. But 52% would stop shopping in a store if they felt AI was monitoring their purchase („Digital and in-store tech are key to Gen Z loyalty,“ Haiss, 2026.). That’s not a small segment of cautious shoppers. That’s a coin flip that determines whether your technology drives engagement or drives customers away.
Camera-based tracking can feel like surveillance. Bluetooth beacons can raise location-tracking concerns. Wi-Fi analytics can operate without clear consent. Any proximity solution that appears to watch the shopper, rather than deliver value to them, runs directly into the privacy concern Gen Z has already named: the feeling of being monitored.
The technology that bridges this handoff has to be opt-in, non-invasive, and immediately useful. It needs to work through the app the shopper already has, trigger content based on physical proximity without passive location tracking, and feel like a feature rather than surveillance.
The $1 Trillion Question for Merchants, Platforms, and Media Operators
The convergence of these trends — entrenched mobile payment behavior, Gen Z becoming the dominant user cohort, the physical-digital shopping loop, and rising privacy expectations — creates a specific and time-bound opportunity.
The market is approaching $1 trillion in proximity mobile payment transaction value. And even if growth slows faster than EMARKETER projects, the behavioral shift is already locked in. The generation driving that growth is the one that shops in loops between physical and digital. The measurement and engagement infrastructure to serve them in physical spaces doesn’t exist at scale. And the privacy bar they set eliminates most of the obvious approaches.
For merchants, payment platforms, and retail media operators, the question isn’t whether to invest in bridging the physical-digital handoff. It’s whether you’ll do it before the $1 trillion in annual mobile payment value flows through a shopping journey you can’t see, can’t measure, and can’t influence.
LISNR’s Radius SDK connects physical spaces to mobile devices using ultrasonic frerquencies every mobile phone speaker can send and receive, delivering content to shoppers’ phones based on proximity without cameras, QR codes, or passive location tracking. Learn how Radius bridges the handoff
Sources
„US Proximity Mobile Payments Forecast,“ 2026. EMARKETER, “US Proximity Mobile Payments Forecast 2026,” March 2026. Forecast data on transaction value, user growth, spend per user, and share of in-store retail.
„US Proximity Mobile Payment Users and Penetration,“ 2026. EMARKETER, “US Proximity Mobile Payment Users and Penetration, by Generation,” March 2026. Forecast data on Gen Z, millennial, and Gen X user counts and smartphone penetration rates.
„Gen Z Path to Purchase,“ Droesch, 2025. EMARKETER, “Gen Z Path to Purchase 2025,” Blake Droesch, October 2025. Survey of US shoppers (Gen Z n=509, ages 15-28), June 2025. Data on brand/product discovery channels, in-store behavior, social media research patterns, and purchase destinations by category.
„Digital and in-store tech are key to Gen Z loyalty,“ Haiss, 2026. EMARKETER, “Digital and in-store tech are key to Gen Z loyalty,” Lisa Haiss, January 29, 2026, citing SOTI’s Retail Tech Assessment. Data on retail app usage and AI/privacy attitudes among Gen Z consumers. https://www.emarketer.com/content/digital-in-store-tech-key-gen-z-loyalty
„The Rise of the Gen Z Consumer,“ 2023. ICSC, “The Rise of the Gen Z Consumer: Career-Driven, Credit-Averse and Tempted by Immersive Retail,” June 2023. National survey of 1,008 Gen Z respondents (ages 16-26), conducted by Big Village, March 2023. Data on brick-and-mortar shopping rates, social media influence on purchase decisions, and in-store purchase motivations. https://www.icsc.com/uploads/about/2023ICSC_Gen_Z_Report.pdf