US shoppers are now choosing instalment plans built into their existing credit or debit cards over standalone buy now, pay later apps by roughly three to one, according to a PYMNTS Intelligence report produced with instalment payments platform Splitit.
The report, based on a survey of 2,034 US consumers, found that 36% had used a card-linked instalment plan in the past three months, against 12% who had used a standalone BNPL provider such as Klarna or Affirm over the same period. That gap, card-linked instalments vs BNPL running at roughly three to one, is the headline number in a wider study of how artificial intelligence is starting to shape Pay Later decisions.
For card issuers, the finding reframes a competitive fight that has mostly been read as banks defending against BNPL specialists. Shoppers are gravitating back towards the credit they already carry, rather than adopting a separate app for deferred payment.
A card-linked installment plan splits an existing card purchase into equal payments without opening a new line of credit: the merchant is paid upfront, and the card issuer keeps the transaction on its own books.
Standalone BNPL works differently. A separate lender such as Klarna or Affirm extends new credit at checkout, outside the cardholder’s existing relationship with their bank. That distinction is why the split matters commercially: one model keeps the transaction, the interest or fee income and the customer relationship inside the issuing bank; the other hands all three to an outside lender.
Credit score protection beats price
The survey also asked what consumers want most from a Pay Later option if artificial intelligence is doing the choosing. Protecting their credit score came out well ahead of cost.
| What consumers want most from an AI-selected Pay Later option | Share of respondents |
|---|---|
| Protecting their credit score | 59% |
| Finding the lowest-cost option | 24% |
| Maximising card rewards | 18% |
Fifty-nine per cent called credit score protection essential, more than double the 24% who prioritise the cheapest option and more than three times the 18% chasing rewards. Pay Later providers have spent years competing on interest-free terms and installment count. This data says shoppers are now optimising for something else first.
Card issuers are already building this
Nandan Sheth, chief executive of Splitit, framed the finding as a signal about where consumer demand is heading rather than a case for new lending products. “The findings point to fundamental consumer requirements,” he said. “Shoppers with purchasing power are looking for more flexibility with the credit they already have.”
Several large US issuers have already built exactly that. American Express launched Plan It in 2017, letting cardholders split purchases of $100 or more into fixed monthly payments with a set fee instead of interest, according to Experian. Chase’s My Chase Plan and Citi Flex Pay work on a similar basis, turning an existing credit line into an instalment plan from the cardholder’s app.
None of the three is new. What the PYMNTS and Splitit data adds is evidence that demand for that kind of feature is now running well ahead of demand for a separate BNPL app, in a market where issuers had largely treated instalments as a defensive add-on rather than a primary selling point.
UK regulation adds a deadline
The findings land days before regulation reshapes the standalone BNPL market on the other side of the Atlantic. The Financial Conduct Authority’s new rules for deferred payment credit take effect on 15 July 2026, requiring standalone BNPL lenders operating in the UK to hold FCA authorisation and run affordability checks for the first time. The regulator’s own data shows UK BNPL borrowing grew from £0.06 billion in 2017 to more than £13 billion in 2024.
From 15 July 2026, that market carries the compliance cost of full consumer credit regulation, while card-linked instalments issued against an already-regulated credit card do not face the same new burden. The EU is moving in the same direction: its second Consumer Credit Directive, (EU) 2023/2225, explicitly brings BNPL schemes into scope, with full application expected once member states finish transposing it into national law.
As the report itself frames it, the next phase of Pay Later innovation is “less about creating new forms of credit and more about making existing credit more flexible, transparent, and accessible.”
