ATLANTA, May 16, 2024 /PRNewswire/ -- Nearly 63% of Gen Z shoppers are more loyal to their credit cards than to retailers, according to recent consumer data from Splitit, the only white-label, card-based installment platform using existing consumer credit. The survey, conducted in partnership with PYMNTS, found that these shoppers would switch retailers at checkout in order to pay in installments with their existing credit card. Furthermore, the survey reveals a considerable misunderstanding that exists in the market, with 33% of all consumers unaware that traditional Buy Now Pay Later (BNPL) programs are new loans. Interestingly, the study also found that Gen Z consumers don't care that these installment loans could negatively impact their credit score.
These findings starkly contrast with the ongoing narrative from legacy BNPL programs that promote themselves as smarter ways to pay for products than traditional bank-issued credit cards. The survey, "Redefining Retail: Consumer Finance Trends Driving the Evolution of Installment Plans," also finds that consumers would prefer to use the unused credit on their bank-issued credit cards for interest-free installment payments. Half (50%) of all consumers surveyed say that they would likely switch to another merchant if that merchant offered card-linked installments at checkout.
"Younger consumers are more loyal to their form of payment than to the brand or retailer where they are shopping," said Nandan Sheth, CEO, Splitit. "Gen Z shoppers are the highest share of consumers that use pay later plans and are the least concerned with the impact traditional BNPL programs can have on their credit scores. However, even though many of the legacy pay later players remind their consumers to never miss a payment, the fact remains that more than one-third of all shoppers have no idea that they are initiating a new loan."
The latest data shows that installment options particularly appeal to consumers seeking to take a more active role in managing their spending. While installment plan use has declined for some discretionary purchases such as dining out, its use for considered purchases, such as home furnishings, has outperformed retail spend trends by 2.6%.
