PayPal (NASDAQ: PYPL) released a new survey, highlighting how U.S. consumers are approaching this holiday season and what merchants should know to capture greater sales and build loyalty. Michelle Gill, GM of Small Business and Financial Services at PayPal said that merchants that enable frictionless experiences and deliver value at every touchpoint will thrive this festive season and establish stronger, long-term customer loyalty.
This holiday season, consumers are turning to AI to find “inspiration” and make purchasing decisions. Merchants that aim to ensure their products are visible and optimized across AI-powered platforms will be well- “positioned to capture demand and drive sales in this AI-driven shopping season.”
AI is becoming a go-to shopping tool, with 40% of Americans – led by 61% of Gen Z and 57% of Millennials – having used AI to “assist with a purchase in the past year, and one in five doing so regularly.”
Adoption is accelerating, as “77% of past or potential AI shoppers plan to use it as a shopping assistant this holiday season, underscoring the need for merchants to appear where consumers are searching.”
Holiday shoppers are turning to AI for value and guidance, with the top ways they plan to use it including finding “the best deals (34%), comparing products (30%), and discovering gift ideas or recommendations (26%).”
As AI reshapes how consumers shop, flexible payment options like BNPL are transforming how they pay, creating a smoother “path from discovery to purchase for both shoppers and merchants.”
Once considered an alternative payment method, BNPL is now a mainstream expectation at checkout. BNPL has become a vital tool for managing cash flow and helping “consumers shop with confidence and flexibility – while empowering merchants to increase conversion and average order value.”
Half of consumers plan to use BNPL as a flexible payment option for holiday shopping this year, citing affordability and budget control “as the top reasons.”
BNPL is driving purchasing decisions, “with 52% of shoppers saying they’re more likely to make a purchase when BNPL is available as a payment option.”
Gen Z and Millennials lead BNPL adoption as one in four use it regularly, and another third have tried it at least once, “making BNPL a core part of how younger generations prefer to pay.”
Consumers are taking more paths to purchase this holiday season than ever before, signaling the “true return of omnichannel retail.” Consumers expect seamless experiences, “meaningful rewards, and value – and merchants that connect every channel will capture both sales and long-term customer relationships.”
In-store shopping is resurging, as “64% of shoppers plan to shop in-store this holiday season, with 41% planning to shop both online and in-store.”
Online shopping still matters, with “28% planning to shop primarily online, underscoring that no single channel dominates the holiday experience.”
Rewards drive decisions where Americans shop as “74% are more likely to shop with merchants offering cash back or rewards.”
Success this festive season will depend on connection, not just convenience alone.
Merchants that are focused on unifying rewards, online and in-store experiences will deepen loyalty and “help fuel long-term growth.”
In order to help with this, PayPal said that it is expanding Pay Monthly to in-store purchases across the U.S., and consumers can also earn cash back on all PayPal BNPL purchases, in-store and online, during the festive season.
PayPal had commissioned Talker Research to survey 1,000 “nationally representative” U.S. adults online from September 5-9, 2025. Percentages for AI data reflect respondents who have “used or considered using AI tools to help with a purchase within the last year.”
Percentages for BNPL data reportedly reflect respondents who “have ever used or considered using BNPL to make a purchase.”