Retailers Embrace BNPL as Other Merchants Prove More Hesitant

With buy now, pay later (BNPL) plans becoming increasingly accepted across merchant sectors, retailers are proving to be the payment method’s biggest champion.

A PYMNTS Intelligence report, “Merchants’ Evolving Perspective on the Value of Card-Linked Pay Later Plans,” created in collaboration with Splitit, drew from a survey of 100 merchants with expertise and leadership responsibilities in accounts receivable (AR), consumer billing and collections, and finance or financial operations. The report explored these merchants’ interest in offering various installment plans.

The results revealed that BNPL is becoming more popular, with 85% of merchants saying that the payment method was used more often during online checkout over the past 12 months.

Yet only one in four merchants surveyed reported that they would most prefer their individual customers to use BNPL at checkout. In contrast, 38% said they would prefer that consumers use installment plans linked to existing general-purpose credit cards issued by any bank at checkout, and 34% said they would prefer that consumers use their own card and arrange the payment plan with their bank after the transaction is completed.

Retailers, however, are not averse to BNPL the way other merchants are.

“Firms in the healthcare and restaurant industries rarely prefer BNPL, while retailers are split in their preference for BNPL or general-purpose card-linked installment programs,” the report observed.

Consumers, for their part, want BNPL options. The report “Divided, Not Conquered: Acquirer and Merchant Confusion Clouds Split-Payments Landscape,” also created in collaboration with Splitit, revealed that roughly half of Generation Z and millennial shoppers had used BNPL at least once in the last year, with 23% of them increasing their BNPL usage in that period. Moreover, 79% of BNPL users said they were very or extremely satisfied with the experience.

The top drivers of their BNPL usage are convenience, financial security and expanded purchasing capability, per the PYMNTS Intelligence and AWS report “Tracking the Digital Payments Takeover: What BNPL Needs to Win Wider Adoption.”

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