The news: US shoppers are open to paying interest on installment plans when offered longer repayment periods, per a PYMNTS Intelligence report.

• 2 in 3 buy now, pay later (BNPL) users say they’d accept interest fees in return for a longer repayment period.
• BNPL users with the strongest credit scores are the most willing to accept this trade-off: 76% of super-prime users would accept interest fees for longer terms, compared with 64% of prime and 50% of subprime BNPL users.

Why this matters: As the BNPL industry matures, it can no longer depend on new user acquisitions alone to bolster payment value growth. Instead, players have to encourage less engaged users to spend more and more often. 

Consumer hunger for pay-over-time financing on big-ticket purchases offers a route for BNPL players to snag more spend—plus interest income—on this cohort’s purchases, per PYMNTS.

• For purchases between $100 and $499, 58% of BNPL users say that they would be willing to pay interest for longer-term loans.
• For purchases between $500 and $999, 79% of BNPL users say they would pay interest for longer terms. 

Implications for BNPL providers: BNPL providers can reach more consumers, especially highest credit quality shoppers, by offering longer-term, interest-bearing loans. 

Partnering with merchants that cater to major purchases made during millennials’ and Gen Xers’ childrearing and homebuying years can help earn loyalty from these cohorts: Parents and new homebuyers are trying to alleviate financial stress for major home, medical, and travel expenses, per PYMNTS.

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