As of the latest reports, split-payment options have seen a significant surge in popularity among US shoppers. According to the PYMNTS Intelligence report, 60% of consumers have utilized these flexible payment methods within the past year, indicating a strong trend toward installment-based purchasing. Split payments, including buy now, pay later (BNPL) plans, allow customers to distribute the cost of their purchases over multiple installments, providing a more manageable financial approach to shopping.
The appeal of split-payment options is evident across various demographics, but it's particularly noteworthy that high-income consumers are among the most frequent users. Contrary to what one might assume, it isn't just millennials, Gen Z, or those with lower incomes who are leveraging these plans; rather, individuals with higher incomes are taking advantage of the flexibility and convenience that split payments offer. The study shows 38% of Gen Z consumers who increased their use of any type of split-payment product in the last year.
In the past year, split-payment methods have gained remarkable traction, particularly among millennials and individuals with high incomes. Specifically, 72% of millennials and 64% of consumers with an income over $100,000 have embraced these payment plans. Notably, the 'Bridge Millennials’ cohort—a demographic positioned between Generation X and millennials—emerged as the strongest advocates for installment payments, with 73% utilization.
Usage was also significant among other generations, including 62% of Gen X and 65% of Gen Z participants, though preferences varied; half of Gen Z showed a preference for “Buy Now, Pay Later” (BNPL) options, while Gen X shoppers tended toward credit card installment plans.
General-purpose card installment plans have emerged as the preferred choice for 45% of consumers, while merchant card installment plans and BNPL plans both attract 37% of the shopping population. This preference underscores the desire for a more controlled and transparent way to handle personal finances, especially for larger purchases.
Income also played a key role in determining the adoption of installment payments. Beyond those earning above $100,000, 61% of people with salaries ranging from $50,000 to $100,000 also utilized installment payments within the last year. Meanwhile, those earning below $50,000 annually were somewhat less inclined to engage with these short-term financing options, yet over half—54%—still chose to use split-payment solutions during the same period.
The benefits of split payments extend beyond consumer convenience. For businesses, offering such options can increase sales, improve customer loyalty, and reduce cart abandonment rates. Merchants who fail to provide split-pay options risk losing up to 22% of their customers to competitors who do offer these services.
The data suggests that presenting installment plans early in the shopping experience, rather than at checkout, is more effective in retaining customers and encouraging additional sales. As the trend continues to grow, it's clear that both consumers and merchants alike see the value in the flexibility and financial control that split payments provide.
