Three fabulous sofas, each costing about the same. Three different retailers. When consumers are deciding where to shop, the financing options a merchant offers can make or break whether the deal is sealed. But while the availability of buy now, pay later and merchant-provided installment options can tip the scales, it’s only in categories where consumers have several similar options.
The greatest impact for Pay Later providers materializes when a consumer is actively weighing a range of comparable choices for a particular good or service. Nearly four in 10 consumers say financing availability influences where they shop for travel, food delivery and events and experiences. By contrast, just one in five say the same for groceries and restaurants, categories where urgency of need, proximity and habit drive consumer buying decisions.
Additionally, financing matters far more to some types of consumers than others. Millennials and Generation Z consumers are up to 13 times more likely than baby boomers to factor in financing options when choosing where to buy.1 Among existing users of Pay Later plans, the impact of financing is an even greater differentiator. Up to 87% of BNPL adoptees and 64% of merchant-provided installment plan users say the availability of those plans shapes where they shop. For purchases where people already have plenty of options, it can be the decisive factor.
These are just some of the findings explored in “Financing the Decision: How BNPL and Installments Reshape Merchant Choice,” the newest installment of the PYMNTS Intelligence exclusive Pay Later Ecosystem series. The report is based on a survey of 2,763 U.S. consumers conducted Feb. 10–March 2, 2026.
Key Findings
1. BNPL options matter most where consumers already have plenty of choice.
Nearly four in 10 consumers say BNPL influences where they shop for travel and food delivery, compared with roughly one in five for groceries and restaurants.
2. BNPL matters most to younger consumers.
For travel, 62% of millennials say BNPL influences their choice of merchant, compared to 37% of consumers overall and just 5% of baby boomers.
3. BNPL shapes behavior among those who already use it.
Across purchase categories, up to nine in 10 heavy BNPL users say it influences their merchant choice.
4. Installment options aren’t going to sway consumers who aren’t using them anyway.
Installment plan availability shapes merchant choice for up to 64% of heavy users, but just 11% to 24% of non-users.
5. Financing shapes healthcare decisions for Gen Z.
More than half of Gen Z (55%) say the availability of installment plans influences where they seek medical and dental care.
BNPL Matters Where Choice Exists
BNPL availability is a differentiator when consumers are deciding between comparable merchants. It matters least for everyday essentials. Nearly four in 10 consumers say BNPL availability influences their choice of merchant for travel (38%), food delivery (38%) and events and experiences (36%). Just 21% cite BNPL as influential for groceries and 20% for restaurant purchases.
It might seem odd that food delivery choice is so dependent on BNPL. However, the availability of the payment method has the most influence when consumers can compare options and delay their purchasing decisions. It has the least impact in routine, habit-based categories.
BNPL Resonates With Younger Consumers
BNPL’s influence on merchant choice is concentrated among millennials and Gen Zers. When booking travel, 62% of millennials say BNPL availability influences their choice of merchant, compared to 37% of consumers overall and just 5% of baby boomers. Gen Z follows closely at 49% for travel. Across higher-cost and discretionary categories, millennials and Gen Z are consistently 1.5 to 2 times as likely as the average consumer, and up to 10 times as likely as baby boomers, to factor in BNPL availability when deciding where to shop.
That gap is also present in everyday spending categories. When choosing a grocery store or medical provider, millennials and Gen Z are roughly twice as likely as the average consumer, and several times more likely than baby boomers, to say BNPL availability influences their merchant choice. Across every category, baby boomers are the least influenced by BNPL, and it’s not even close. BNPL’s role in shaping merchant decisions is almost exclusively limited to younger consumers.
BNPL Drives Existing User Behavior
More than one in 10 consumers (14%) used BNPL in the last three months. PYMNTS Intelligence segments those users into three groups based on the types of purchases they financed:
- Dual users: 5% — Used BNPL for ongoing everyday expenses only (groceries, restaurants, food delivery, medical/dental, utility bills, subscriptions)
- Occasional users: 5% — Used BNPL for occasional discretionary purchases only (non-grocery retail, travel/vacation, home services)
- Everyday users: 4% — Used BNPL for both everyday expenses and occasional discretionary purchases
- Non-users: 86% — Did not use BNPL in the last three months
How much the availability of BNPL influences a consumer’s choice of merchant depends heavily on how they already use BNPL.
Dual users are the most swayed, with 57% to 87% saying BNPL availability shapes where they shop. Occasional users are more selective. BNPL influences higher-cost decisions like travel (63%) and home services (58%), but rarely routine spending like restaurants (26%) or groceries (35%).
Everyday users similarly consider BNPL availability only in the categories where they already use it: utilities (55%), subscriptions (58%) and groceries (53%). It seems that the payment method is central to how they manage recurring costs.
Non-users are largely unmoved. Fewer than three in 10 say BNPL influences their merchant choice in any category.
In short, BNPL can influence store choice, but only among consumers who are already on board, and only in ways that mirror how they already use it.
Installments Drive Consumer Stickiness
As with BNPL, credit card installment plan users can be divided into the same three groups:
- Dual users: 17% — Used credit installment plans for both
- Occasional users: 5% — Used credit card installment plans for occasional discretionary purchases only
- Everyday users: 12% — Used credit card installment plans for ongoing everyday expenses only
- Non-users: 66% — Did not use credit card installment plans in the last three months
Dual users are most influenced by merchants’ financing options. More than 60% say it shapes where they shop for travel and events. For this group, financing isn’t just a feature; it’s a deciding factor.
It’s striking how far that influence extends. Even consumers who use credit card installment plans only for day-to-day expenses show strong sensitivity in discretionary categories: 57% for events and 49% for travel. Financing is associated with higher sensitivity to merchant choice in discretionary categories, even among consumers who primarily use it for everyday expenses.
Non-users, meanwhile, rarely factor financing availability into their choice of merchant in any category. If they’re not going to use merchant-provided installment plans, why should they care whether they’re offered? Thus, fewer than one in four non-users say financing affects their merchant choice in any category, suggesting that getting consumers to try BNPL and/or card installment plans once can pave the way to repeat usage.
Financing Shapes Gen Z Healthcare Decisions
For most consumers, financing is a tool for managing big-ticket discretionary purchases, including travel, home services and experiences. For Gen Z, it’s more than that. It can even shape decisions about where to seek medical and dental care.
Medical and dental bills rank as the third-most common category where BNPL availability influences merchant choice among existing Gen Z BNPL users. Nearly half (49%) say it impacts their decision, tied with travel. When it comes to merchant-offered installment plans, these bills jump to first place at 55%. No other generation comes close. For millennials and bridge millennials, healthcare ranks fifth or sixth. For Gen X, it falls to seventh.
This gap highlights a distinct generational pattern. Gen Z Americans seem to approach healthcare spending the same way they do any major purchase: by evaluating not just the provider but also the payment options they offer. For healthcare providers, dental practices and the platforms that serve them, financing availability is a competitive differentiator in ways it hasn’t been for previous generations.
Conclusion
Financing options don’t always drive merchant choice, but in areas where consumers have real options, it can be the deciding factor.
Its influence is strongest in categories where consumers are actively comparing options to make careful, considered decisions, such as travel, experiences, home services and food delivery. By contrast, merchant choice in groceries, restaurants and other day-to-day necessities is strongly driven by habit, proximity or necessity, where financing plays a smaller role.
The impact on merchant choice is greatest among younger consumers and those already engaged with Pay Later products. Among non-users, the effect is minimal, reinforcing that these patterns are concentrated within the existing user base, not beyond it.
For merchants, the implication is that financing is most powerful at the point of comparison, especially when consumers have plenty of similar providers to choose from. The opportunity lies in being the merchant that makes financing availability visible, accessible and relevant at exactly the right moment.
Methodology
“Financing the Decision: How BNPL and Installments Reshape Merchant Choice” is the newest installment of the Pay Later Ecosystem series, a PYMNTS Intelligence exclusive series. It is based on a survey of 2,763 U.S. consumers conducted Feb. 10–March 2, 2026. This report examines how the availability of BNPL and merchant-offered installment plans affects consumers’ choice of merchant or store across 10 purchase categories, including everyday expenses and occasional discretionary purchases. The sample was balanced to match the U.S. adult population by age, gender, education and income.
1. PYMNTS Intelligence uses the following approximate birth dates and approximate age ranges in 2026 for generational cohorts: baby boomers: born in 1964 or earlier and now aged 62 or older; Generation X: born between 1965 and 1980 and now aged 46–61; millennials: born between 1981 and 1996 and now aged 30–45; bridge millennials: born between 1978 and 1988 and now aged 38–48; millennials: born between 1991 and 1999 and now aged 26–35; and Generation Z: born in 1997 or later and now aged 29 or younger.↩
