BNPL No imminent threat to store cards

Today, nearly a quarter of the world’s population, millennials and their slightly older millennial friends are the most courted of all cohorts from a marketing perspective, and their buying behavior is the obsession of virtually all brands and retailers.

In this Millennial Minute, we examine these digital-first consumers with respect to their use of alternative credit buy now, pay later (BNPL) versus the use of store-issued credit cards.

The BNPL revolution is seen as driven primarily by millennial consumers, and it’s true. But when and why this demographic chooses installments over other forms of credit is a picture that has been somewhat distorted by the blizzard of BNPL headlines over the past few years.

We analyzed this question in “The Truth About BNPL and Store Cards,” a collaboration between PYMNTS and PayPal based on a census-balanced survey of more than 2,160 US consumers.

Millennials embrace BNPL

For context, the study found that 52 million U.S. consumers had used BNPL by the end of 2021. Legacy card issuers continue to monitor the situation closely, fearing that BNPL is hijacking – or already hijacking – sales from store cards to a third-party BNPL. solutions.

Overall, the “The Truth About BNPL and Store Cards” report found that 59 million US consumers shopped at merchants offering store cards in the previous 30 days, and out of that number , we found that approximately 4.9 million consumers (8.3%) financed the purchase using BNPL .

Millennial demos are less likely than Gen Xers or baby boomers to have a store card in the first place, with research finding that 26% of millennials and older millennials have store cards. And they are more likely to use BNPL for their purchases.

According to the report, “Millennials are the most likely of all generations to have used BNPL at these merchants, as 46% have done so. This contrasts with baby boomers and seniors, of whom only 37% have ever used BNPL at merchants with whom they held store cards.

Table 2

Additionally, we found that millennials and Gen Z are more likely to turn to BNPL more in the future, with 6% of millennials saying they will “pay exclusively using BNPL over the next three months, and 21% plan to pay using a mix of BNPL. and store the cards in the same amount of time. Among Gen Z, 8% and 23% expect to pay with BNPL and a combination, respectively. »

It’s the 6% figure that store card programs will want to monitor more closely, as it represents millennials who seem to be considering moving away from traditional credit usage for BNPL.

By comparison, the number of consumers across all demographics who intend to use BNPL exclusively in the next three months stands at 4%.

The advantage of options

An important takeaway from the study is not that stores with card programs should avoid BNPL, but rather the opposite, as the choice of payments is a deciding factor among millennial consumers.

Our research concludes that 41 million consumers in the United States want to pay with BNPL, and merchants are advised to include it at point of sale, as it is better to make the sale in installments than risk losing a sale – and a customer – lack of choice at checkout.

“Although consumers may not always want to use BNPL options when store cards are available,” the study says, “adopting BNPL options can help retailers convert millions more sales than they would do without the BNPL plans,” and those sales will likely be geared toward millennial buyers.

Get the study: Report The Truth About BNPL and Store Cards



On: Shoppers who have store cards use them for 87% of all eligible purchases – but that doesn’t mean retailers should start buy now, pay later (BNPL) options at checkout. The Truth About BNPL and Store Cards, a collaboration between PYMNTS and PayPal, surveys 2,161 consumers to find out why providing both BNPL and Store Cards is key to helping merchants maximize conversion.

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