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Credit card issuers claimed the top three spots in J.D. Power’s second annual buy now, pay later satisfaction study, with American Express Co.’s Plan It topping the list. JPMorgan Chase’s My Chase Plan and Citibank’s Citi Flex Pay rounded out the top three.
American Express’s Plan It, which it launched in 2017, earned a satisfaction score of 695 out of 1,000 points, while My Chase Plan and Citi Flex Pay posted scores of 686 and 676, respectively. By comparison, high-profile, non-card issuer BNPL brands such as Klarna AB (633), Sezzle (630), and Affirm Holdings Inc. (618) all posted satisfaction scores below the average of 634.
PayPal Holdings Inc.’s PayPal Pay In 4 was the highest ranking BNPL offering from a non-card issuer, ranking fourth with a score of 656. Overall, customer satisfaction with BNPL providers increased 16 percentage points year-over-year, JD Power says.
Reasons why consumer satisfaction with BNPL loans offered through card issuers rates so highly include easy account review, security, and reasonableness of terms.
“Card issuer plans generally receive higher satisfaction scores than other plans across all six satisfaction dimensions–customer support; making purchases where I want; perks for making purchases; reasonableness of terms; reviewing and managing account digitally; and security of account information,” Miles Tullo, managing director of banking and payments at J.D. Power says by email. “The largest gaps are in customer support, reviewing and managing my account digitally, and security of account information.”
By comparison, Tullo says, non-card-issuing BNPL providers post lower satisfaction scores across most performance indicators. “Klarna and Affirm receive below-average scores across most of the dimensions,” Tullo says. “They are increasing acceptance with merchants, but need to make improvements to attract and retain additional consumer customers, particularly as more BNPL plans launch with strong existing acceptance.”
The top three key performance indicators with the most influence on customer satisfaction are ease of choosing repayment options, ease of managing payments, and ease of reviewing purchases and transactions. “These indicators are met between 53% and 62% of the time, suggesting that many providers have room to improve on account-management functions,” the report says.
Financially healthy consumers, which represent 21% of BNPL users, give BNPL providers the highest overall satisfaction score, at 731, while financially vulnerable consumers, which account for 32% of BNPL usage, give BNPL providers a satisfaction score of 593.
“Financially healthy consumers are more likely to find BNPL terms reasonable than other consumers are, because they are likely less concerned about missing a payment and therefore using BNPL to budget/spread out repayment,” Tullo says.
By comparison, financially vulnerable consumers tend to be less satisfied with repayment terms and their BNPL plan’s digital account-management experience, Tullo adds.
Increasing consumer satisfaction with BNPL loans increases the likelihood they will take another loan out from the same BNPL provider. Some 48% of consumers say they definitely will reuse the same brand, up 4 percentage points from 2023, the study says.
