The report, Merchants' Evolving Perspective On the Value of Card-Linked Pay Later Plans, underscores the high value that card based instalments offer to retailers. The survey also found that nearly three-quarters of merchants prefer card-linked instalment options over traditional BNPL programmes.

Merchants' Evolving Perspective on the Value of Card- Linked Pay Later Plans is a PYMNTS Intelligence and Splitit collaboration. This edition examines merchants' current support of and interest in offering various instalment plans. It draws on insights from an original survey of 100 merchants with knowledge of and leadership responsibilities in AR, consumer billing and collections, and finance or financial operations. It conducted this survey from March 7 to March 28.

"Median spend on card-linked instalments is over $1,000, compared to $386 on average for traditional BNPL plans," said Nandan Sheth, chief executive officer of Splitit. "Nearly 90 per cent of merchants acknowledge that these card-linked plans drive higher sales conversion and enhance customer loyalty, marking a pivotal shift in the pay-later landscape. Therefore, it's no surprise that nearly three-quarters of merchants prefer card-linked instalments, and over a third believes their customers are very or extremely likely to switch merchants to use these plans, a 164 per cent increase since December 2023."

As customer acquisition and retention costs continue to skyrocket, card-linked instalments are valued by nearly nine out of ten merchants (88 per cent) to improve customer acquisition and retention. This is in comparison to 64 per cent for traditional BNPLs, as per the report.

Additional key findings from the study say that 82 per cent of merchants confirm an increase in card-linked instalments for in-store purchases over the past twelve months, compared to 67 per cent of merchants reporting an increase in BNPL use in-store during the same period. 37 per cent of merchants surveyed are now using card-linked instalments, an increase of 16 per cent over the past six months. 53 per cent of merchants believe that consumers would purchase higher-priced items or services if consumers were aware of card-linked instalment options prior to checkout.

"Card-linked instalments cater to customers who don't need new credit but value a faster checkout process," continued Sheth. "This segment is being ignored by traditional BNPL lenders. Merchants view card-linked instalments as incremental to legacy BNPL options, which force consumers to originate a new loan. Additionally, merchants appreciate that keeping instalments on an existing card simplifies returns and other back-office processes. This combination is fuelling the strong demand for card-linked instalments among merchants."

Fibre2Fashion News Desk (RR)