(New York, NY) The rapid evolution of FinTech solutions continues to reshape consumer perceptions of banking, with stored value accounts (SVAs) emerging as a potential competitor to traditional banking accounts and cards. Auriemma Group’s latest issue of The Payments Reports uncovers positive sentiments around SVAs, underscoring their role in the financial ecosystem and raising questions about their long-term viability as a banking alternative.

SVAs offered by providers like PayPal and Venmo allow consumers to preload or receive funds and use them for a variety of transactions. Auriemma’s research shows that 61% of debit cardholders view SVAs as at least complementary to traditional banking, while 31% believe these accounts could replace at least some banking functions. Notably, 8% feel SVAs could entirely replace traditional banking services.

“Stored value accounts represent an important evolution in financial tools, but the collapse of Synapse underscores the risks of fintech intermediaries not covered by the FDIC,” says Jonathan O’Connor, Senior Manager of Research at Auriemma Group. “While stored value accounts offer benefits like lower fees and faster transactions, traditional banks deliver stability, security, and trust—advantages that consumers continue to value.”

What Can Traditional Banks Do?

SVAs are causing a modest stir among cardholders. Less than three-in-ten say they would be likely to use the option if offered by a FinTech provider. However, as SVAs grow in popularity, traditional banks can differentiate themselves by doubling down on their strengths and addressing evolving consumer needs. Auriemma’s research highlights several strategies banks can use to endear themselves to current and potential customers:

  1. Building Trust: Traditional banks should emphasize their strong track record of security—including FDIC backing—and fraud prevention. Providing clear, transparent policies and educating customers about safeguards can build trust that SVAs may not yet fully inspire.
  2. Enhanced Digital Experiences: Streamlining mobile and online banking interfaces can help banks compete with the tech-first approach of FinTechs. User-friendly apps with integrated budgeting tools, instant payments, and easy account management could make a significant difference.
  3. Personalized Financial Products: Banks can leverage their broad customer data to offer tailored financial products, such as personalized savings plans or rewards programs that align with individual spending habits.
  4. Bundled Offerings: By packaging SVAs with more traditional banking services—like high-yield savings accounts, credit cards, and loans—banks can create holistic financial solutions that FinTechs may struggle to match.

Opportunities for Growth

Most of those who have used a SVA with a FinTech provider say they would likely use more of that provider’s products, if available. This highlights the possibility of expansion SVAs create for those who use them. While largely benefiting FinTechs hoping to expand into other financial services, SVAs could also be a gateway for traditional banks hoping to deepen their relationship with new and existing customers.

“Traditional banks have the advantage of deep customer relationships, established financial stability, and the trust that comes with rigorous regulatory oversight. By leaning into these strengths and innovating alongside FinTechs, banks can remain central to their customers’ financial lives,” says O’Connor. “Our research shows that the future of banking will likely blend the reliability of traditional institutions with the agility and accessibility of modern FinTech solutions, creating a dynamic ecosystem that meets a diverse set of consumer needs.”

Survey Methodology

The Payments Report

This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in October 2024 among 804 adult debit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.

(New York, NY) Over the past few years, post-purchase issuer-provided installment plans have surged in popularity, thanks to offerings like American Express Plan It, My Chase Plan, and Mastercard Installments. Recent data from Auriemma Group’s The Payments Report indicates these plans are now rivaling in-store installment offers. Availability increased 18 percentage points since Q4 2019, with 40% of credit cardholders having been offered this option, while in-store installment plans remained stagnant at 36% over the period.

“Post-purchase installment plans provide cardholders the benefits of splitting payments without the hassle of signing up for a new product,” says Jonathan O’Connor, Senior Manager of Research at Auriemma. “It is no surprise these options are catching up to in-store Buy Now, Pay Later offers. Cardholders with access to this option enjoy the benefits of both products.”

While enrollment with Buy Now, Pay Later at the point-of-sale in-store is slightly higher than post-purchase issuer-provided installment plans among debit cardholders (19% and 12%, respectively), again the trend line is more favorable for the latter, which has grown 7-percentage points, compared to 4-percentage point growth for in-store enrollment.

And when asked which option they would prefer, over two-thirds of debit cardholders consistently say they would rather pay with their card at the point-of-sale and later enroll their purchase onto an installment plan with a card provider. The remaining one-third prefer enrolling with a Buy Now, Pay Later provider, like Klarna or Affirm, at the point-of-sale.

“Given the prevailing trends and cardholder preferences, we expect post-purchase issuer-provided installment plans to outpace in-store Buy Now, Pay Later options in the coming year.” says O’Connor. “Our next issue of The Payments Report will delve further into these products to explore their usage and potential trajectory in light of the expanding installment lending landscape in retail.”

Survey Methodology

The Payments Report

This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in March and April 2024 among 800 adult debit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.

About Auriemma Group

For 40 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognized experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships, and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximize their performance. Auriemma serves the consumer financial services ecosystem from our offices in New York City and London. For more information, email Jonathan O’Connor at research@auriemma.group.

(New York, NY) In the ever-evolving landscape of retail finance, Buy Now, Pay Later (BNPL) is reshaping the way consumers approach their borrowing and purchasing decisions. As store card ownership wanes, BNPL has emerged as a compelling option for modern shoppers seeking flexibility and convenience. Auriemma Group’s latest issues of The Payments Report and Cardbeat US uncover the factors driving point-of-sale decisioning between BNPL and store cards, and how a good BNPL experience can increase store card acquisition.

Buy Now, Pay Later directly competes with store cards at the point-of-sale.

BNPL offers have become commonplace when shopping online or in-store. According to The Payments Report, 64% of debit cardholders say they have been offered an installment plan online (up from 45% in Q4-2019). In-store offers have also increased slightly, now at 36%. And about half of those offered an installment plan in either channel report enrolling in the past 12 months. This momentum is in direct contrast to store cards, whose ownership has dropped 14-percentage points (now 39%) since 2015.

“We found that at the point-of-sale cardholders are most interested in applying for these products for larger ticket size purchases,” says Jonathan O’Connor, Senior Manager of Research at Auriemma. “However, when both Buy Now, Pay Later and store cards are offered, cardholders are near evenly split on which option to select, with a slight preference towards Buy Now, Pay Later.”

But what would happen if retailers only offered store card applications at the point-of-sale? Not offering BNPL at the point-of-sale would have a marked impact on store credit card enrollment. 54% of those more likely to select BNPL say they would be likely to apply for a store card instead, if it were the only option presented to them.

Fee amounts and interest rates inform cardholders’ application decisions.

About four-in-ten debit cardholders say a retailer’s recommendation would make them likely to apply for a BNPL plan (41%) or store credit card (35%) at the point-of-sale. However, according to Auriemma’s research, it is the least important of the factors tested.

While a retailer’s recommendation or signage may initiate decisioning, BNPL and store card acquisition often hinges on fees, rates, and benefits. Over eight-in-ten debit cardholders say these factors are at least somewhat important when deciding whether to apply for a BNPL plan or store card at the point-of-sale. Second tier factors include trust in the brand, credit score impact, and one-time discount offers.

“Buy Now, Pay Later plans offer consumers payment flexibility without the commitment of applying for a credit card,” says O’Connor. “And while in many ways Buy Now, Pay Later can be seen as a competitor to card product acquisition and usage, the method can act as a gateway to a future card relationship.”

A good Buy Now, Pay Later experience could open the doors to store card application.

While there is much to be said about the ways BNPL competes against store cards, there is also evidence that the option could create a pipeline to store card enrollment. According to Cardbeat US, 41% of credit cardholders say a good BNPL experience with a brand they shop at regularly is likely to encourage them to apply for a store card, if offered. This is particularly true of Gen Z and Millennial cardholders.

54% of credit cardholders who were approved for a BNPL plan say they were offered a store card at some point during their experience. Notably, 69% of these cardholders applied and were approved for a store card during that time, highlighting just how synergistic the two products can be.

“Buy Now, Pay Later does have an impact on store card application, but the pendulum swings both ways,” says O’Connor. “Some consumers will choose Buy Now, Pay Later at the point-of-sale over and over again, while some will inevitably find their way to store card enrollment through positive BNPL experiences, demonstrating the potentially symbiotic relationship between the two offerings.”

Survey Methodology

The Payments Report

This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in March and April 2024 among 800 adult debit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.

Cardbeat US

This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in March 2024 among 800 adult credit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.

About Auriemma Group

For 40 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognized experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships, and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximize their performance. Auriemma serves the consumer financial services ecosystem from our offices in New York City and London. For more information, email Jonathan O’Connor at research@auriemma.group.

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