Splitit and PYMNTS have officially published the results from their latest survey, which highlights the opportunity that merchants have to leverage pay later options as a powerful customer acquisition tool this holiday season.
Named as “The Use of Card-linked Installment Plans in Holiday Shopping,” the stated study basically informs us on how more than 38% of consumers plan on using pay later options for self-gifting for the given period.
More on the same would reveal that nearly half of all surveyed parents see pay later plans as a tool to reduce the guilt that comes with splurge purchases. This very number goes upto 52% if we talk about millennials. Another 62% of participants were found wanting to know upfront whether the pay later option is available or not. Such a sizeable contingent showcases BNPL’s potential in the context of driving greater adoption, particularly as more consumers (27%) are willing to pay full price when they can split payments into manageable chunks.
Next up, the study discovered that credit card-linked installments continue to be the most popular pay later option over the last 12 months at 39%. They are closely followed by traditional BNPL at 38%, with merchant store cards behind at 31%.
“Though we see a 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,” said Nandan Sheth, CEO of Splitit. “Millennials are leveraging pay later options to justify large purchases and better manage their finances. In fact, 67% of parents intend to use pay later options to finance their holiday purchases this year. This season also presents an opportunity for merchants to acquire new customers, as 43% of consumers interested in using pay later plans value it enough to influence where they shop.”
Going back to holiday season shopping trends, an estimated 28% of holiday shoppers reported themselves as highly likely to use pay later plans this season. Two-thirds of consumers, who intend to use pay later options this holiday, plan to use them to buy gifts for others. Beyond that, the report also found that 30% of holiday shoppers expect to use pay later more frequently during the holiday season than during the rest of the year.
To expand further upon these purchases, clothing and accessories is expected to account for 60% of pay later gift purchases this holiday. Alongside that, the research also claims that luxury items such as vehicles, furniture and electronics are among the purchases consumers want to finance via credit card installments, reflecting a trend in premium spending.
Rounding up highlights would be a piece of data, which says that around 20% of consumers are interested in using a pay later plan this holiday, citing improved financial management as their top reason for financing.
Among other things, we ought to mention how the survey in question was conducted on the back of responses from more than 5,248 consumers.
Founded in 2012, Splitit’s rise up the ranks stems from enabling shoppers to use the credit they’ve earned by breaking up purchases into monthly interest-free installments using their existing credit card. As for merchants, the company makes it possible for them to give customers an easy and fast way to pay for purchases over time without originating new credit, and therefore, improve conversion rates, as well as increase average order value. Splitit’s excellence in what it does can be understood once you take into account how it currently serves many of Internet Retailer’s top 500 merchants. Not just that, it is also accepted by more than 1,500 eCommerce merchants across 30 countries. The company’s shopper base also stretches across more than 100 countries.
