Buy-Now, Pay-Later Consumers Still Tap Credit Cards, Study Finds
(Bloomberg) -- Consumers of buy-now, pay-later and point-of-sale services are also very active users of traditional credit cards, a study found, an indication the industry isn’t booming at the expense of credit card issuers or other lenders.
Among the six million respondents who had used the delayed payment options over 18 months, only 4% reported that they don’t have a credit card, according to the TransUnion research. Some 89% of respondents who use point-of-sale programs -- with scheduled payments on large purchases over a period of time -- have credit cards.
“Consumers who may utilize point-of-sale financing are not doing so at the expense of traditional credit,” said Liz Pagel, senior vice president of consumer lending at TransUnion. “These new forms of financing are growing the credit pie – opening up more opportunities for both consumers and lenders.”
The findings run contrary to some assumptions that consumers are using delayed payment options out of wariness toward credit cards or limited credit access, it said. Still, credit card firms and payment giants have already taken action to compete in the growing market, including developing their own split-payment options and acquiring up-and-coming startups.
©2021 Bloomberg L.P.