The article reveals insights on consumer preferences and spending patterns for different types of pay later plans:
Key Takeaways:
Consumer Preference for Options: Consumers want to know their pay later options before purchasing, but many merchants don't offer the preferred choices.
Spending Patterns: Consumers prefer general-purpose credit card installment plans for larger purchases and BNPL for smaller purchases.
Average Purchase Amounts: Purchases made with general-purpose credit card installment plans are significantly higher ($1500) than those made with BNPL ($685) or merchant/store card installment plans ($638).
Repayment Timelines: General-purpose credit card installment plans typically have longer repayment timelines (18 months) compared to merchant/store card plans (14 months) and BNPL (8 months).
Merchant Revenue and Industry Impact: A merchant's annual revenue and industry influence their preferred installment plan choices. High-revenue merchants see higher average purchase amounts for general-purpose and merchant/store card installment plans, while mid-sized merchants see the highest BNPL spending.
Consumer Choice Drivers: Consumers choose installment plan options based on purchase price and desired payoff periods.
Recommendations for Merchants:
Offer Diverse Options: Merchants should offer a variety of pay later plans to cater to different consumer preferences and purchase amounts.
Strategic Alignment: Align payment options with customer needs by understanding their typical purchase amounts and preferred repayment timelines.
Consider Industry and Revenue: Tailor installment plan offerings based on your company's annual revenue and industry to maximize customer satisfaction and spending.
Overall, understanding consumer preferences and spending patterns can help merchants strategically offer pay later plans that drive sales and enhance the customer experience.
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