Financing as a mechanism to close a transaction, but newer evidence suggests installments may be influencing whether the transaction happens at all.
In PYMNTS Intelligence’s “Financing the Decision: How BNPL and Installments Reshape Merchant Choice,” 2,763 U.S. consumers provided insight into how the availability of buy now, pay later (BNPL) and merchant-provided installment plans affects where they choose to spend.
Financing appears to exert the greatest influence in categories where consumers have meaningful alternatives and time to compare them. Travel, food delivery and experiences showed comparatively high sensitivity to financing availability, while grocery and restaurant purchases were materially less affected, suggesting habit and immediacy still dominate routine spending decisions.
Financing availability becomes influential when shoppers view merchants as interchangeable. In those moments, installments can become part of the value proposition — fostering so-called stickiness — rather than simply a checkout feature.
Installments Gain Traction
One of the more consequential findings is that installment products appear to reinforce existing consumer habits more than they create new ones.
PYMNTS segmented BNPL users into behavioral groups and found that consumers already using financing reported materially greater sensitivity to whether merchants offered it. Across categories, existing users often said financing availability shaped where they purchased, while nonusers showed far less responsiveness.
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That pattern carries over into installment plans tied to credit cards.
Consumers who used installment products across both everyday and discretionary purchases reported some of the highest levels of financing-driven merchant selection. Even consumers who primarily reserve installments for recurring expenses still showed elevated sensitivity in categories such as travel and events. By contrast, consumers who do not use installments rarely cited financing availability as a meaningful input into merchant choice.
The implication is notable for customer relationship economics. Once consumers adopt installments within a category, the financing experience itself can become part of the reason they return and the relationships prove durable, and in a word, sticky. Merchant preference begins to attach not only to assortment, price and convenience, but also to the structure of payment.
That does not mean installments guarantee loyalty. The report does not suggest financing overrides product quality or brand affinity. Instead, it indicates financing becomes more influential when multiple merchants already meet a consumer’s baseline expectations.
Younger Consumers Pull the Market
Demographic differences in the research are difficult to ignore.
Millennials and Generation Z consistently reported greater sensitivity to financing availability than older consumers. In travel, millennials reported some of the strongest financing influence levels, while Gen Z followed closely across multiple discretionary categories. Across routine categories such as groceries and healthcare, younger consumers also remained more likely than older cohorts to say financing shaped where they purchased.
Healthcare offered perhaps the clearest generational distinction.
Among Gen Z consumers already using BNPL, medical and dental spending ranked among the leading categories where financing availability influenced provider selection. Merchant-offered installment plans scored even higher. For older cohorts, healthcare financing ranked materially lower as a decision variable.
When consumers can compare comparable options, payment flexibility appears to shape which relationship wins and which one fades from consideration.
At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.
