It’s not just those pinching every penny and living paycheck to paycheck who are interested in making their payments in installments, like our latest research on the growth — and potential explosion — of buy-it-now, pay-after bank offerings ( BNPL) show .
Maybe it’s about catching on to the latest trend or trying to be a part of what’s hot, but the group that we’ve found to be showing the most interest in bank-issued BNPL plans is the one that seems to be the most Least Needs: Consumers making more than $100,000 annually, with nearly half of them (47%) craving their financial institutions’ installment plan structure.
The second highest interest comes from consumers with an annual income of $50,000 to $100,000 (42%) and consumers with an annual income of less than $50,000 (39%).
This is perhaps one of the surprising findings in our Banking On Buy Now, Pay Later: Installment Payments and Untapped Opportunities of FIs, a collaboration between PYMNTS and height. The report is based on a survey of 2,237 US consumers conducted between November 5 and 10, 2021.
We asked them what features they would like BNPL providers to offer. The survey assessed consumers’ BNPL usage and interest in accessing bank-backed BNPL plans.
Interest in bank-issued BNPL plans is not analyzed solely based on income level. We also found that 60% of Millennials, 57% of Bridge Millennials and 54% of Gen Z consumers say they are interested in using bank-issued BNPL plans.
As might be expected, those living paycheck to paycheck and having some trouble paying their bills showed the most interest in bank-issued BNPL offers at 58%, followed by consumers who live paycheck to paycheck but in able to pay their bills on time (45%) and those not living paycheck to paycheck (32%).
You have to wonder if banks are aware of this interest and are working on a solution to accommodate the growing desire for payments to be spread over time, or if they are letting more advanced and innovative companies steal their customers while sticking with what for it has worked for decades. Even the COVID-19 pandemic hasn’t been enough to get everyone to cave in to be safe.
If and when it does, consumers are ready to be part of the transition. Our research shows that 70% of current BNPL users say they would be interested in using their banks’ BNPL plans if such offers were available, with strong interest from those already using BNPL plans and those that are not yet part of the practice.
Meanwhile, 7% of consumers using BNPL today in our survey said they were less interested in a banking product than another company.
And to show that some things never change when it comes to what consumers expect from those who manage their money, 53% of consumers say trust is the most important factor when choosing a lender for a short-term loan product.
Banks have an advantage over other FinTechs when it comes to building and maintaining consumer trust as there are more face-to-face interactions with banks than with FinTechs where the goal is to keep the transaction quick and painless.
Half of consumers who use short-term credit say the ability to spread their payments over time is important when choosing a short-term credit product, and about the same proportion (49%) cite simplicity and convenience as important factors .
“Banks can more easily offer these other factors, giving greater weight to consumer preference for bank-issued products,” the report said.
Want to know more about banks and the growing demand for BNPL? Download Buy Now, Pay Later: Installment Payments and Untapped Opportunities of FIs now.