Would you pay $12.50 every two weeks for a sweater that costs $50? 

Paying for low cost items online through POS (point of sale) financing programs such as Affirm and Afterpay has emerged within the past year and is now offered by hundreds of online retailers, including Urban Outfitters, Forever 21, and even Walmart.

The companies offer an alternative to credit cards through small, interest-free payments taken over weeks or months. Shoppers can just apply directly on a retailer’s site and then immediately checkout with a payment plan.

Is the latest pay-over-time trend the next big sea change in retail or just a passing ship in the night?

A CivicScience survey of 2,550 U.S. adults revealed that 20% of U.S. adults were interested in payment plans for low-priced goods.

According to a broader CivicScience survey tracking awareness and intent of using interest-free payment plans such as Affirm and Afterpay over time, 21% of U.S adults have used and liked them. Usage of the programs has been on a steady incline since March, when just 17% of surveyed respondents reported using the programs and liking them. While a slight increase, it’s still promising given how recent many of the companies are.

Payment Plans Aren’t Just a Young Person’s Game

While the option to pay over time for low-priced items carries greatest appeal with adults age 25-34, interest spans across generations, with nearly 25% of adults between 18 and 54 interested in using the payment options.

Actual engagement with the programs mirrors interest. Over one-third of adults between ages 18 and 54 have either used the programs or intend to use the programs.

In other words, buying low-cost goods over time has a wide appeal. The more drastic differences emerge among the population when it comes to income. The less you earn, the more likely you are to be interested in the programs. More than a quarter of those who make $50K or less per year are interested in buying low-cost items over time, compared to 11% of $100-$150K earners and 10% of $150K+ earners.

And directly correlated to income is home ownership. Renters are twice as likely as homeowners to be interested in the payment programs. 

Credit Card Debt Might Be Driving Payment Plans

Considering that credit card debt is on the rise, being able to pay for low-cost goods over time interest-free may ease the burden of monthly expenditures and help retailers drive conversion and retention rates. However, some argue that it feeds impulse buys and just drives consumers further into debt.

The survey shows that owning credit card debt may be driving interest in these types of payment plans. Sixty-one percent of those interested in the programs are carrying credit card debt, compared to less than half of those who aren’t interested.

Student debt also plays a role. As a whole, those who are interested are more than twice as likely to have student debt compared to those who are uninterested.

So, there are two plausible takes here. One the one hand, owning debt may lead some to seek out alternative forms of payment to save money. On the other, it could just be another means to debt. The survey shows that those interested in the programs are more likely to have a difficult  relationship with money and finances than those who aren’t interested. Those who are interested in payment plans were twice as likely to say they managed their money badly.

Likewise, the payment plans appeal significantly more to those who say they have difficulty controlling spending.

Contending With Amazon

Taking a quick look at shopping habits shows that those interested in payment plans for low-cost items are bigger online shoppers.

That’s not surprising, but Affirm’s new app may help it to gain a broader customer base and more frequent usage. The app will let people search for goods and checkout through an Affirm payment plan, even at brick-and-mortar retailers that accept Apple Pay or Google Pay.

However, it’s suggested that the new app will have to contend with Amazon, which is currently the go-to marketplace for the majority of Americans’ product searches. The survey indicates that people interested in Affirm and similar payment programs are also more favorable to shopping on Amazon, compared to those who are uninterested in the programs. 

Whether or not the app will successfully poach customers away from Amazon is to be determined. But it’s worth noting that there is a high favorability for shopping at Walmart among those interested in the payment plans. 

Since Walmart offers Affirm payment plans, the question is whether or not greater adoption would disrupt Amazon’s status quo; and more broadly, if the payment plans will help or hurt shoppers and retailers in the long run.