Study Reveals Surge in Card-Linked Installments: In-Store Usage Up 82%, Online Transactions Up 68%

Date – 06-Aug-2024

A new report from Splitit and PYMNTS highlights the rapid shift in payment methods and its effects on customer loyalty. Titled “Innovations and Developments of Card-Linked Installment Plans,” the study reveals a notable rise in the use of credit card-linked installments, with in-store usage up 82% and online transactions increasing by 68%.

“Merchants are increasingly aware of the benefits of credit card-linked installments for boosting sales and enhancing customer loyalty,” said Nandan Sheth, CEO of Splitit. “These installment plans leverage existing credit on consumer cards, offering unmatched convenience and transparency. Our research indicates that 57% of merchants are worried about losing customers to competitors who provide this payment option.”

The report also shows that over one-third of merchants plan to enhance their card-linked installment offerings, with only 4% having no plans to expand or improve. The number of merchants who believe shoppers might switch to a competitor for the convenience of interest-free installments using their credit card has surged by 165% in the past year.

Key findings include:

• 50% of consumers are willing to switch merchants to use credit card-linked installments.
• Nearly 75% of retailers now prefer credit card-linked installments over other Buy Now, Pay Later (BNPL) options, a 17% increase from last year.
• 20% of acquirers believe their clients are likely to switch acquirers to offer interest-free installment plans, up 133% since October 2023.
• Consumers are 60% more likely to choose credit card-linked installments over BNPL for purchases over $1,000.
• 52% of acquirers plan to innovate their credit card-linked capabilities in response to growing demand for flexible payment options.
• 37% of merchants now offer credit card-linked installment options at checkout, up from 32% in December 2023.

The report, “The Use of Card-Linked Installment Plans in Online and In-Store Sales,” is based on surveys of 4,993 consumers, 150 merchants, and 100 acquirers conducted between August 8, 2023, and March 28, 2024.

Splitit, a global payment solutions provider, allows consumers to use their existing credit by breaking purchases into monthly interest-free installments. Splitit helps merchants increase conversion rates and average order values by offering a straightforward, credit-based payment option. The company serves top Internet Retailer merchants and is accepted by over 1,500 eCommerce merchants in more than 30 countries, with shoppers in over 100 countries.