Atlanta Research Highlights Influence of Pay Later Plans on Holiday Shopping, Driving Tourism and Retail Growth in U.S.

Image generated with Ai

A recent study by Splitit and PYMNTS reveals that nearly 40% of consumers intend to use “pay later” options for self-gifting this holiday season, highlighting a significant shift in shopping behaviors. The report, titled “The Use of Card-linked Installment Plans in Holiday Shopping,” indicates that pay later options are influencing consumer spending, especially among Millennials and parents.

According to the study, 38% of Millennials expect to increase their usage of pay later options for holiday shopping, compared to the rest of the year. “We are witnessing strong interest among shoppers who see pay later plans as an opportunity to manage larger purchases for themselves and others,” said Nandan Sheth, CEO of Splitit. “Flexible payment options have become crucial in helping consumers balance holiday spending with financial planning.”

Key findings emphasize that 67% of parents plan to utilize pay later services to finance holiday purchases, while nearly half feel that installment plans reduce the guilt associated with higher-priced items. This trend is more pronounced among Millennials, with 52% noting that pay later plans make splurging on premium items feel more manageable.

The report highlights that many shoppers prefer credit card-linked installment options, which have seen a 39% adoption rate over the last year, closely followed by buy now, pay later (BNPL) options at 38%. Additionally, about 28% of shoppers report a higher likelihood of using pay later services during the holidays, especially for gifts.

Furthermore, the study shows that the availability of pay later options is highly influential for consumers when choosing where to shop, particularly among Millennials and parents. Nearly 50% of these groups say they select merchants based on their preferred installment plans, signaling a significant opportunity for retailers to attract new customers by offering these options.

Popular categories for pay later purchases include clothing, accessories, and luxury items like vehicles, electronics, and furniture. Splitit’s research also reveals that 62% of consumers want to know upfront if a pay later option is available, with 90% indicating they’d be more likely to use these options if advertised earlier in the shopping process.

The findings in this study provide retailers with actionable insights into consumer preferences and demonstrate the growing importance of flexible payment solutions during the holiday season.