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Twenty Percent of Consumers to Use BNPL this Holiday Season

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TSG and ETA survey finds savvy consumers are leaning on easy-to-use payment technologies including BNPL, 1 click accounts, digital wallets, and eCommerce for holiday shopping.

Economic uncertainty has driven many consumers in the U.S. to think twice about holiday shopping; however, savvy consumers are finding new payment technologies like buy now, pay later (BNPL), digital wallets, and eCommerce is making it easier than ever to shop.

Twenty percent of consumers said they plan to use BNPL this holiday season to help them manage their budgets. That’s according to new insights released by TSG, a globally recognized analytics, intelligence, and solutions-focused firm in the payments industry, and the ETA (Electronic Transactions Association), the world’s leading advocacy and trade association for the payments industry.

TSG and ETA surveyed over 1,000 U.S. consumers in October to see if some of the newer payment technologies and habits formed through the Covid-19 pandemic continue to drive payment choice at checkout. Download the associated infographic.

“We found that ease of use is the key driver for thirty-five percent of consumers,” says Mike Strawhecker, President of TSG. “Over fifty percent of shoppers now use peer-to-peer payment apps or leverage 1-click accounts as a method of payment.”

Another technology that continues to make strides is digital wallets. The study found that compared to last year, more consumers were planning to make at least some payments through a digital wallet this year (73% in 2021 vs. 78% in 2022).

Still, plastic remains king when it comes to holiday spending. Using a debit card at checkout was the most popular option for shopping in-store (61%), but both credit and debit card usage were equally popular online (57% and 55%, respectively). Payment with a credit card was the second most popular option for in-person spending (53%), followed by cash (39%) and then digital wallets (28%).

While pandemic concerns around in-store shopping have waned, 84 percent of consumers plan to shop online. The top three online channels for shopping this year are Amazon (71%), retailer websites (52%), and other marketplaces such as Etsy, Facebook, and eBay (19%). In fact, TSG found that eCommerce spend was up nearly 50 basis points during the week of Amazon’s second Prime Day (compared to 2021).1

Although concerns remain for consumers around affordability and inflation, savvy shoppers continue to enjoy the seamlessness of recent payment technologies as they fill their carts this holiday season. See below for more key themes uncovered in this year’s study.

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Key Study Themes

Consumer Scrutiny

Results of this year’s study indicate greater consumer scrutiny when it comes to what they buy and how – compared to last year more have waited to start their holiday shopping and many cited concerns about rising costs as the reason why.

Economic Concerns

Consumers had a lot of economic concerns this year, some more intense than last year.

  • Worries about the affordability of gifts were greater than last year (72% in 2022 over 61% in 2021), as well as concerns over shipping delays (56% in 2021 over 64% in 2022).

Pandemic Conerns Warning

There are some signs concerns over the pandemic are waning, as a greater number of consumers reported planning to do some shopping in-store this year compared to last year – only 32% of consumers reported being worried about the safety of shopping in-store compared to 47% last year. To some extent, this may also indicate consumers are planning for more deliberation this year and willing to check multiple websites or shops to ensure they are getting the best deal.

Credit Vs. Debit

This year we made a key change in our methodology – we have now broken out a payment option – credit cards and debit cards (which were previously combined into one option) to better understand the nuances of card payments.

  • This year, when it comes to holiday spending, using a debit card at checkout was the most popular option for shopping in store, but credit vs. debit card usage were equally popular online. For in-person spending, payment with a credit card was the second most popular option, followed by cash and then digital wallets.

BNPL Not Going Away

As a trend, consumer reported usage of buy now, pay later options increased slightly from 2020 to 2021, and again from 2021 to 2022.

  • This year 20% of consumers indicated they planned to use buy now pay later for holiday shopping, while another 20% had not made a decision yet. This is a payment mode where conversion is more likely to happen after consumers try it, indicating that initial hesitance can be overcome with experimentation, which often leads to adoption.

Other Payment Methods

Payment via phone may have gained in popularity over the past year

  • P2P apps as a method of payment had a very high conversion rate – 80% of consumers who had tried them reported using them with some frequency.
  • 1-Click saved accounts also had a high conversion rate – 76% of consumers who had tried them reported using them with some frequency. Although its very common for consumers to use 1-Click account methods via personal computer, it’s a mode more typically used on a phone.
  • Digital wallet usage was also rising – 40% of digital wallet users this year said they were at least somewhat confident leaving their house without a physical wallet

Ease of Use

Some new questions were added to the study this year to better understand the decision factors spurring payment method usage – we asked consumers about the influences on their choice of spending mechanism.

  • Across most demographic factors, the clear winner was ease of use, even compared against payment methods that might offer a better deal or greater security. One exception was noted – older consumers (55+) were more likely to make payment choices according to the one offering them the best deal, rather than ease of use.


Overall, holiday spending this year will likely continue to have much to do with how easy various methods of payment are for consumers to use, even above and beyond what kind of deal a payment mode may offer. However, savings were still top of mind for older consumers, and typically cited as the second greatest concern for consumers in other age brackets.

Survey Methodology: TSG and ETA surveyed 1,081 consumers in the U.S. to understand how payment preferences and spending trends have shifted this holiday season. The survey was conducted between October 18, 2022 and October 20, 2022. The survey represents consumers across demographics such as state, gender, age, and household income. The margin error is +/-3.0% at a 95% confidence level

1Data sourced from CLIMATE, powered by TSG. CLIMATE aggregates data from issuers and merchants through TSG’s external data partner, Replica. Replica provides detailed, timely data covering mobility, economic activity, demographics, and land use, with nationwide coverage. Email to learn more.

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Media Contact

Andy Nuss, +1 833.690.1301

Senior Director of Marketing