Any store
split in 4.

Retail Insights


For many enterprise merchants like Macy’s, Kohl’s, and Victoria’s Secret, private label credit cards (PLCCs) are a fixture—and a major revenue driver. For consumers, the perks seem straightforward enough: PLCCs provide a convenient way to purchase big-ticket items and earn loyalty points with their favorite stores.

Since the 2008 financial crisis, however, consumer perception of credit cards has become increasingly bleak. As a result, a growing number of shoppers are turning to flexible payment options like Buy Now, Pay Later (BNPL) as an alternative. BNPL enables shoppers to pay for their purchase over a few weekly or monthly installments, usually without interest. 

The flexible nature of BNPL is attractive to a wide range of consumers, particularly younger shoppers. Generation Z and millennials together represent more than 80% of BNPL transactions,(1) which in 2020 accounted for $20 to $25 billion in the US alone.(2) By 2025, that number is expected to grow to $680 billion globally.

With the increasing popularity of BNPL, many retailers now find themselves considering partnering up with an installment payments provider. For those who already offer PLCC, it’s natural to wonder—can the two offerings coexist?

The truth is, BNPL reaches a unique segment of the consumer base, so it’s very much worth pursuing alongside a PLCC. For this segment, BNPL cultivates fierce customer loyalty. BNPL can even be leveraged as a turndown option for a PLCC.

Here are four reasons why retailers should offer Buy Now, Pay Later alongside their private label credit cards.

Ask a millennial: younger customers prefer BNPL.

As borne out by the numbers cited above, younger shoppers are particularly averse to high-interest credit cards and the risks of accruing debt. Nearly two in five people specifically use BNPL services because they want to avoid paying credit card interest, according to a survey by Motley Fool.(3) 

Why Retailers Should Offer BNPL

As the spending power of millennial and Gen Z consumers increases, credit cards are quickly losing their grip on market share to debit cards and newer options like mobile payments and BNPL. In just one year (2017 to 2018), consumer preference for credit cards decreased by 7%.(4)

These shoppers don’t want another credit card, but they still need a way to pay over time. Enter BNPL: with this installment payment model, shoppers can enjoy a modernized version of layaway where they get their purchase instantly and pay it off over time, without the interest of a PLCC.

Adoption of BNPL by younger generations has been swift, but its popularity is growing among older shoppers, too. 42% of Gen Xers and 20% of baby boomers have used BNPL services.(5) Still, the focus for retailers should be on these younger shoppers, given that Gen Z already represents 40% of all US consumers.(6) By only offering a private label credit card, retailers risk completely bypassing the payment option of choice for this audience.

Buy Now, Pay Later can be a viable turndown option for your private label credit card program.

A growing majority of younger shoppers would prefer not to use credit cards. But even for those who want to use credit cards, not all of them have access to this payment option. About a third of Americans have poor or fair credit scores, and many have no credit at all.(7) As a result, these shoppers may not qualify for a PLCC. 

When shoppers don’t qualify for a retailer’s credit card, BNPL may be a viable alternative. With Zip, signing up doesn’t require a hard credit check—nor does the approval process impact the customer’s credit score. 25% of consumers choose BNPL specifically because it allows them to access a higher spending limit without a credit check, while 14% choose BNPL because they can’t get approved for a traditional credit card.(8) 

By offering BNPL as an alternative to your PLCC, your brand can still maintain loyalty among this segment of your customer base. Over a third of merchants agree that BNPL helps them reach customers they wouldn’t otherwise be able to, and 44% agree that it increases overall sales.

It’s important to note that BNPL isn’t only popular among shoppers with poor credit. Research from suggests that consumers across income groups use BNPL, and over 75% of customers use BNPL even when they have the funds to cover a full purchase.(9)

BNPL drives repeat purchases.

BNPL shoppers aren’t fickle. These services foster intense customer loyalty and drive repeat purchases for retailers. Nearly one in five BNPL shoppers use BNPL every month, and 8% use it once a week.(10) PLCCs, on the other hand, can sometimes be a one-and-done for customers who are looking to make an occasional big-ticket purchase like furniture or jewelry. 

When BNPL is an option, consumers may opt to make more frequent, smaller purchases. Our retailer partners see an average 80% increase in repeat customers and 60% increase in AOV after integrating with Zip.

That’s not to say that PLCCs don’t drive customer loyalty. They often do, but this can come with the cost of loyalty rewards, discounts, and exclusive promotions. BNPL, on the other hand,  fosters intense loyalty without retailers shouldering the cost of discounts and rewards. When a customer chooses to check out with Zip, the retailer receives full payment for the purchase upfront—no discounts required.

Decisions, decisions, decisions: customers crave options.

The great thing about BNPL is that it doesn’t have to be an either/or option. Retailers can offer both a PLCC and a BNPL option to their customers. 

In fact, that’s exactly what their customers want: two-thirds of millennials expect multiple, flexible options at checkout. And if they aren’t satisfied with the available payment options, nearly 10% of shoppers will abandon their cart rather than complete the purchase.

By offering both BNPL and PLCC, retailers can satisfy consumer demand for flexibility at checkout. A PLCC can even be used in tandem with BNPL to make purchases from your brand, enabling customers to earn loyalty rewards with the convenience of BNPL.

Buy Now, Pay Later and Private Label Credit Cards: Better Together

BNPL’s growing popularity presents an imperative to retailers. The BNPL customer skews younger, and is more likely to adopt BNPL over a PLCC. This is a new audience that demands options and an omnichannel experience

By offering Buy Now, Pay Later in addition to a private label credit card, retailers can reap the rewards of increased customer loyalty, repeat purchases, and sales. 

Learn more about how to sell smarter with Zip today.


  1. Cardify

  2. Banking Dive

  3. Motley Fool


  5. Motley Fool

  6. Forbes

  7. Forbes

  8. Motley Fool


  10. Motley Fool


Shira Schwartz assum legimus vis cu, mel et utamur aeterno oblique, cu pro tota sanctus persecuti. In saperet detraxit est, his eros tollit ne. Minim eripuit percipitur eos ad, wisi periculis nam in. Tota dicit per ne, dicat summo elaboraret ne duo. Mei scaevola principes no, ea vix inani oporteat