Current results Swiss Payment Monitor 2/2022

Research note dated August 24, 2022

Half of the Swiss population open to "buy now, pay later" offers

Around half of the Swiss population is open to payment by instalments in principle. In a hypothetical purchase situation, however, "buy now, pay later" offers were chosen rather rarely in a selection of different payment options. This is shown by the current Swiss Payment Monitor of the ZHAW and the University of St. Gallen.

Just under half of the Swiss population can basically imagine buying a desired product on instalments. One third, on the other hand, cannot imagine doing so at all, even if it does not incur any interest or fees. This is the result of the sixth Swiss Payment Monitor (SPM) conducted by the ZHAW and the University of St.Gallen. For the survey, more than 1,400 people were questioned in May 2022, representing the whole of Switzerland.

Women are more inclined to buy by instalment

The acceptance of such "buy now, pay later" (BNPL) offers is independent of age and financial starting position. "Half of the respondents were told that they could not currently afford to buy the product, while the other half could easily afford an immediate purchase," explains co-author Nina Heim from the ZHAW. "However, this had no statistically significant influence on the acceptance of an instalment payment." Only among the sexes was there a difference in this respect: women are more inclined than men to buy a product on instalments that they could not otherwise afford. However, if they could afford the product without any problems, men are more open to an instalment purchase than women. 

"Buy now, pay later" offers hardly play a role

The instalment purchase option plays a subordinate role in concrete (hypothetical) purchase decisions compared to other payment options - even if it is free for the respondents. However, when buying a refrigerator (price: CHF 1,649), one in five people would opt for a purchase with fixed or flexible instalments over 12 months. This figure is halved if an interest rate of 5 per cent (for fixed instalments) or 6 per cent (for flexible instalments) is charged on the outstanding instalments. "The decline in flexible instalments at 6 percent interest is particularly striking," says ZHAW payments expert Marcel Stadelmann. "The hire-purchase option only seems attractive at low interest rates and most likely for larger amounts for important, useful purchases.

Installment purchase as a new payment trend?

BNPL is a purchase solution on account or in instalments, which enables the decoupling of the time of consumption from the time of payment. This instalment purchase solution is not fundamentally new, but modern payment solutions differ from traditional instalment purchases in terms of the payment experience by offering more individual and simpler solutions with a lot of freedom of choice. Accordingly, consumers can better adapt the decision of when and how to pay for purchases to their own needs. "The popularity of instalment payments could increase in the future, for example if the perception of future expenses changes due to high inflation rates," says Tobias Trütsch, payment economist at the University of St.Gallen.

Credit cards as a billing product are benefiting from the mobile boom

The regular survey of the payment behaviour of the Swiss population shows only minor changes compared to the last survey in November 2021. The debit card remains the most frequently used means of payment, followed by cash, which is used for every third payment in retail outlets. The popularity of mobile payments continues to grow. In distance selling, every second payment is now processed via a mobile device, which also benefits the credit card as a billing product: Every third payment from the distance is settled via a credit card.

The full report is available for download below. Older versions of the Swiss Payment Monitor are filed in the archive

Swiss Payment Monitor 2022 - How does Switzerland pay?, Edition 2/2022 - Survey May 2022

Keywords: payment behavior, debit card, credit card, cash, mobile payment, neobanks, buy-now-pay-later