Making Sense of the BNPL / Store Card Divide

When consumers have the ability to pay with store cards, they tend to use them.

PYMNTS research shows that 87% of store cardholders who had shopped in the past 30 days have used those cards for their most recent eligible purchases. That means that just 13% of consumers who patronized stores where they had cards chose a different payment method.

Even when shoppers choose not to use their store cards for eligible purchases, they typically pay using either debit or credit cards — and hardly ever pay with buy now, pay later (BNPL) options.

Our research shows 7% of store cardholders used debit cards for their most recent store card-eligible purchases, while another 4% used credit cards. And a tiny fraction — just 0.2% — of store cardholders paid for their recent eligible purchases using PayPal.

These figures make it crystal clear that consumers rarely consider BNPL when they are making purchases that are store card eligible.

Shoppers tend to use store cards for a few main reasons, chief among them rewards options and comfort and speed. Forty-two percent of cardholders who paid with store cards on their last eligible purchase said they did so because of rewards, while 36% who paid with their cards did so because it was speedy and comfortable.

Just 22% of cardholders who did not use those cards on their most recent eligible purchases did so to earn rewards with other payment methods. This makes it clear that rewards programs are a key differentiator separating consumers’ use of store cards from other payment methods.

Forty percent of the customers who chose not to use their cards for their most recent eligible purchases said it was because using credit cards, debit cards, or, to a smaller extent, PayPal was faster and more comfortable.

Consumers also considered factors such as whether their purchases were priced at a low or high dollar value, whether they had money they needed to make a purchase, and other factors when deciding how to pay, but these considerations happened less frequently.

For more on the dynamic between BNPL and store cards, download your copy of The Truth About BNPL And Store Cards, a PYMNTS and PayPal collaboration.