Consumers treating themselves with BNPL

Nearly four out of 10 consumers (38 percent) plan to use pay later options for self-gifting this holiday season, according to a study from Splitit and PYMNTS. The study also found that 38 percent of Millennials will use pay later options more frequently during the holiday season than they do throughout the year.

“Though we see strong interest in shoppers buying for themselves using pay later plans this holiday, nearly two-thirds of consumers also plan to use flexible payment options for gifting,” said Nandan Sheth, CEO of Splitit, a payment solutions provider that specializes in pay later solutions tied to credit cards for ecommerce merchants. “Millennials and parents, in particular, are leveraging pay later options to finance their holiday purchases this year. In fact, 67 percent of parents intend to use pay later options to finance their holiday purchases this year."

There also are opportunities for merchants to acquire new customers, as 43 percent of surveyed consumers said the payment option offered sufficient value to influence where they shop, Sheth added.

The Use of card-linked installment plans in holiday shopping study, conducted by PYMNTS Intelligence and Splitit from Sept. 30 through Oct. 5, 2024, draws on a survey of over 5,200 consumers.

Consumers like card-linked plans

The study revealed that nearly half of parents (49 percent) plan to use pay later plans to assuage the guilt of splurge purchases by spreading large expenses over time. Among millennials, it’s 52 percent.

Here are some additional findings from the survey:

• 39 percent of consumers said they liked pay later plans linked to general purpose credit cards, followed by traditional BNPL offerings (38 percent) and those tied to store credit cards (31 percent).

• Better than one-quarter of consumers (27 percent) are willing to pay full price when there’s the option of splitting payments into manageable chunks.

• Clothing and accessories are among the most popular categories for pay later purchases, accounting for almost 60 percent of pay later gift purchases.

• Luxury items, such as vehicles, furniture and electronics are among purchases consumers want to finance via credit card installments this holiday season, reflecting a trend in premium spending.

• Twenty percent of those interested in using a pay later plan this holiday season cited improved financial management as their top reason.

• A majority of consumers (62 percent) would prefer to know a pay later solution is available before deciding what to buy, rather than after. Ninety percent of those that do not use pay later plans would be more likely to use them if offered during the purchase journey, indicating that early advertising of the payment option would be helpful for attracting new users.

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