60% of US Shoppers Used Split-Payment Options in the Past Year

Split-payment or installment plans such as buy now, pay later (BNPL) enable consumers to spread the costs of purchases over multiple installments.

Consumers appear to prefer these options. PYMNTS Intelligence data revealed that in the 12 months before being surveyed, about 3 in 5 shoppers opted for installment plans when shopping.

This growing popularity has captured the attention of merchants. Seventy-eight percent of them told PYMNTS Intelligence that they plan to enhance their use of installment plans, while 39% of acquirers, the entities that enable merchants to offer these plans, said they plan to do the same.

Enhancing payment options makes sense. As PYMNTS Intelligence discovered when compiling the report “Divided, Not Conquered: Acquirer and Merchant Confusion Clouds Split-Payments Landscape,” the three leading payment plans — general purpose credit card plans, merchant card plans and BNPL — each offer features that resonate with different consumer segments.

The report found that 60% of shoppers overall opted for split payment options in the last year. General-purpose card installment plans were the most popular, with 45% of consumers going that route. Merchant card installment plans and BNPL plans both appealed to 37% of consumers.

A deeper analysis showed the popularity of split-payment plans is especially high among millennials and high-income consumers, with 72% and 64%, respectively, having used them in the last year. Bridge millennials — the generation between Generation X and millennials — were the biggest proponents of installments, with 73% using them in the last 12 months. Meanwhile, 62% of Gen X respondents and 65% of Gen Z used installments, although half of Gen Z preferred BNPL, whereas Gen X consumers showed a preference for general-purpose credit card installment plans.

Earning levels also shaped buying habits. Sixty-four percent of shoppers who earn more than $100,000 annually paid via installments in the last 12 months, as did 61% of those who earn between $50,000 and $100,000 annually. Consumers earning less than $50,000 a year appeared slightly more reluctant to take on the short-term debt of installment payments, but 54% of them opted for split payments in the last year.