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Issuer-provided installment plans, such as American Express Plan It, My Chase Plan, and Mastercard Installments, are on par in popularity with in-store installment offers, finds Auriemma Group’s The Payments Report.
American Express Co. was among the first issuers offering its own buy now, pay later plan, having launched it in 2017. AmEx recently signed Delta Air Lines as a Plan It client. Klarna AB was among the first to offer in-store BNPL services in the United States.
Auriemma says availability of issuer-provided installment plans increased 18 percentage points since the fourth quarter of 2019 with 40% of credit card holders offering this option, while in-store installment plans remained “stagnant” at 36% over the period.
One factor for the rise in issuer-provided plans may be convenience for consumers. “Post-purchase installment plans provide cardholders the benefits of splitting payments without the hassle of signing up for a new product,” Jonathan O’Connor, Auriemma senior manager of research, says in a statement. “It is no surprise these options are catching up to in-store buy now, pay later offers. Cardholders with access to this option enjoy the benefits of both products.”
Other data show that BNPL enrollment at the point of sale among debit cardholders is at 19%, and at 12% for post-purchase, issuer-provided BNPL arrangements. The growth rate for each, however, is different. Post-purchase plans have grown seven percentage points compared with a four percentage points increase for in-store enrollment.
Going forward, issuer-provided installment plans may hold more growth potential. More than two-thirds of debit cardholders say they would rather pay with their card at the point of sale and later enroll that card in a BNPL plan with a card provider, Auriemma says. The other 33% prefer using a BNPL provider at the point of sale.
