Artificial intelligence (AI)-assisted search has emerged as one of the top three ways Gen Z residents discover online government services, according to new PayIt research, which finds that state and local agencies could push digital adoption of government services above 90%.
PayIt’s 2026 Consumer Digital Government Adoption Index found that 22.3% of Gen Z respondents who had recently completed an online government transaction discovered digital services through AI-assisted search. AI ranked behind only traditional internet search and agency websites among Gen Z discovery channels.
Across all age groups, 12.4% of digital users said AI-assisted search helped them find online government services.
“Ensuring that LLMs can find your digital offerings must now be a core part of your digital adoption strategy,” the report says.
The report recommends agencies use clear, structured website content, schema markup, and strong search engine optimization practices to improve visibility in both traditional and AI-assisted search.
The report is based on a July 2026 survey of 1,038 U.S. adults, which found significant room for growth in digital adoption. Of the respondents, 815, or 78.5%, had completed an online state or local government transaction during the previous 18 months. In addition, 35.9% of respondents who had completed a government transaction offline said they were likely or very likely to use a digital channel next time. Another 30% were undecided.
PayIt calculated that those groups could bring the share of residents who are already online or potentially persuadable to 92.7%.
User experience remains a hurdle. Among digital users, 36% said they had started a government task online but had to finish it through another channel. Gen Z respondents were the most likely generation to report abandoning a digital task and were also less satisfied with their most recent online government experience.
The survey also found strong expectations for transparency around AI. Eighty-seven percent of respondents said state and local agencies should disclose when AI is involved in delivering a public service.
PayIt identified three factors as central to reaching digital adoption above 90%: promoting services through multiple channels, improving the user experience, and moving more services online.
“That 90% digital adoption target is closer than most agencies think,” the report says.
