New Data Shows BNPL Doesn’t Cannibalize Private Label Credit Cards at Checkout

While 52 million United States consumers used buy now, pay later (BNPL) options to make purchases in December 2021, BNPL’s meteoric rise into the limelight has given some retailers pause. They are facing mounting pressure to provide customers with the BNPL options they have come to expect, but they are also concerned that providing BNPL options could cut into their store card sales.

In truth, the chances of BNPL cannibalizing store card sales are next to nothing. In PYMNTS’ latest survey of 2,161 U.S. consumers, we found that not even a single store card holder in our study paid for their most recent store card-eligible purchase with BNPL.

In The Truth About BNPL And Store Cards, A PYMNTS and PayPal collaboration, PYMNTS surveyed 2,161 U.S. consumers about their propensity to use BNPL, store cards and other payment methods at the retail point of sale to get the inside scoop on why BNPL is not store cards’ competition, but rather their natural complement.

Key findings in our research include:

• Given a choice, most store card holders choose store cards. Consumers who have store cards use those store cards to make 87% of all store card-eligible purchases. The remaining 13% of those purchases are almost always made using credit cards, debit cards and cash. BNPL options are rarely even considered for store card-eligible purchases.

• Consumers tend to use store cards and BNPL options for different reasons. Consumers use store cards for rewards and BNPL for high-priced purchases. Sixty-four percent of consumers say that store cards allow them to earn more rewards, while 78% say that BNPL options enable them to make larger purchases.

• When store card holders use BNPL, they often use it for one specific type of item: those with high price tags. Nearly twice as many consumers say they would pay for an item priced at more than $1,000 with BNPL as would pay with store cards. This goes to show that although store cards are almost always the preferred payment method for store card holders, BNPL can still help retailers drive sales for high-priced items.

These are only a few of the findings we uncovered about how consumers view and use BNPL and store cards. The Truth About BNPL And Store Cards gives a firsthand account of why providing both BNPL and store card options is a must for retailers in 2022 and beyond.

To learn more about why BNPL can help retailers maximize sales, download the report.