A 24-year-old opens an app, taps through checkout, and receives approval for a buy now, pay later plan in under a minute. There is no branch visit, phone interview, or human anywhere in the process. Months later, an installment slips. The first person who ever contacts that customer about the credit is a collector calling their cell phone. The call goes unanswered. That outcome is predictable because the collection experience suddenly asks the customer to abandon the digital behaviour that created the account.

The scale of the shift

Around 59% of Gen Z consumers now use buy now, pay later services, and roughly 40% use them weekly. Delinquency is rising with adoption. About 41% of users report paying late on at least one loan in the past year, while 56% of Gen Z users say they struggle to track installment due dates. That last number matters. Many missed payments are not acts of defiance. They are the result of managing five apps, changing balances, and a dozen competing due dates without one clear view of what needs attention.

Why the phone call fails

Traditional collections was built around outbound calling. For younger customers, that model breaks in two places. The channel is wrong because unknown numbers are screened by default and voicemail is treated as a formality. The emotional experience is also wrong. Talking to a stranger about money is a shame-loaded conversation. Consumers who have never discussed their finances out loud often avoid starting now. Avoidance can look like unwillingness to pay, but the underlying issue is frequently anxiety. TransUnion found that 60% of consumers prefer self-service to resolve debt. McKinsey found that 73% of late-stage delinquent customers made a payment after digital outreach, while self-service increased cured accounts by 15%.

A digital-first resolution path

Digital-first collections starts by choosing the right channel, message, and moment for each account instead of defaulting every customer into a dialer queue. SMS and email can reach a segment that will never answer an unfamiliar call. The first message should lead directly to a secure self-service experience where the customer can review the balance, understand available options, set up a plan, or pay in full. Conversational AI can answer routine questions at any hour. Human agents remain essential for hardship, disputes, complex negotiation, and moments that require judgment. The difference is that the customer chooses when a conversation is helpful. The result is higher engagement, faster resolution, fewer complaints, and better sentiment. Collections is not primarily a persuasion problem for this generation. It is a design problem. The frictionless experience that made credit easy to access should also make repayment easy to complete.