Many shoppers like buy now, pay later (BNPL) options because of the flexibility: They can pay for a purchase over weeks or several months, with or without interest. But one common BNPL format has gained broad popularity among shoppers, and our research team found out why.

This particular option lets shoppers pay for a purchase in 4 interest-free payments every 2 weeks. It’s known as Pay in 4 (formerly split pay) in Affirm’s product suite, and similar versions are offered by other BNPL providers.

What attracts customers to this pay-over-time option? Our research team asked a group of 750 shoppers, almost half of whom were Affirm users. More than 7 in 10 were repeat customers of either Affirm’s Pay in 4 or a similar 4-payment option from another provider. The research was conducted in October 2020.

Why shoppers choose it

When asked why they chose a pay-in-4 option (from Affirm or another BNPL provider), the respondents gave these 3 main reasons:

• 36% want to avoid negative impact to cash flow/budget

• 32% prefer to pay over time, even if they can pay the total up front without negative impact to cash flow/budget

• 16% want to take advantage of interest-free offers

The preference for financial control is clear. This 4-part payment option appeals to shoppers who want some wiggle room in their budget without having to pay interest. Here’s how two respondents put it:

“It’s something I can incorporate into my budget so it’s more manageable and not feel like it’s going to be a huge strain on my finances.”

“I like that I have a little bit more breathing room than just taking $300 out of my checking account right now.”

Busting two myths

Because of the popularity of using Pay in 4 (both Affirm and non-Affirm versions) to buy apparel, many merchants assume this payment method is only for fashion brands. But our research showed that shoppers like to use it for other purchases, too. While fashion buys were most popular (52%), respondents also used this form of payment for home & furniture (23%), luxury (20%), fitness & gear (20%), and electronics (19%) transactions.

The popularity and convenience with this form of payment has also led many to believe that split pay is mostly for purchases around $200 or less. But 39% of respondents said they would be willing to use it for a $200-$600 purchase. That means for a $400 television, for example, nearly 4 in 10 shoppers would be willing to pay $100 every two weeks to buy it.

As the amount creeps up to $150 for each installment ($600 total price), the appeal among shoppers drops for this form of payment, according to our research. Many shoppers prefer a different pay-over-time option for more expensive purchases—such as monthly installments over 3, 6, 12 months or more, which Affirm can also provide for your business.

Top benefits for merchants

Offering a pay-in-4 option to shoppers can bring many upsides for your business. It boosts incremental revenue by increasing cart sizes and pulling forward sales that otherwise might have been lost or delayed. Respondents said that if this 4-payment option was not available for their purchase, they would have: 

• Delayed their purchase (34%)

• Not completed the purchase (27%)

• Bought fewer items (18%)

• Bought less expensive items (11%)

Pay in 4 can also reduce friction at checkout and accelerate repeat purchases. With Affirm, shoppers supply 4 pieces of info to get an approval decision within seconds—most customers can complete the purchase in 3 clicks. And customers pay off their purchase in 6 weeks or less, so they’re ready to make more purchases sooner.

Affirm’s Pay in 4 comes with a unique benefit shoppers love: no late or hidden fees. Customers always know up front exactly how much they will pay, and that amount will never change. This builds loyalty that can help your business: Our partners see an average 20% repeat purchase rate with Affirm customers.

Retailers who’ve implemented split pay with Affirm have also reported lifts in average order value, conversion, and more. Cole Haan saw a 23% lift in conversion rate and a 185% increase in daily Affirm sales volume.

“Our customers see the Affirm split pay option as a way they can better afford buying our products for themselves—or even utilize during gift-giving season,” said Megan Lindstrand, Vice President of Global Marketing for Cole Haan. “The interest-free appeal, together with the greater conversion rate, are some ways split pay is having a positive impact on our e-commerce business.”

Could this pay-over-time option have a similar impact for your business? Learn more how Affirm can increase sales as well as boost conversion and repeat purchase rates.