Holiday Shoppers Eye BNPL and Gift Cards – Digital Transactions

With the holiday shopping season underway, consumers are likely reviewing their lists with a keen eye on their budgets, making buy now, pay later and gift cards options a consideration for many, suggests the 2026 Consumer Holiday Spending Study issued by the Electronic Transactions Association and TSG, a payments-research organization.

In the report, 47% of 1,099 U.S. consumers surveyed, say they do not plan to use BNPL this holiday season with 20% intending to increase their use of BNPL and 25% anticipate using it about as much as they did a year ago. Just 9% intend to use it less than last year. BNPL is often used to help with unexpected purchases and to make budgeting easier.

Affordability and budgets are concerns for consumers this holiday shopping season with 64% concerned about affordability, a 17% year-over-year increase, and 57% keen to manage their budgets, also up 17% from 2025.

TSG, based in Omaha, Neb., found that the most frequent users of BNPL payments were middle-income consumers with 10% saying they use it frequently, followed by 9% of high-income and 8% of low-income consumers.

The research also suggests middle- and high-income consumers are more likely to continue to use BNPL after trying it, says Kelly Prange, TSG senior research analyst, and that only half of low-income consumers who tried used it regularly.

The reason for that may be tied to the nature of credit. “Low-income consumers may be less likely to be offered advantageous repayment terms, which may impact their ability to adhere to those repayment terms, or impact their likelihood to use the technology in the future,” Prange tells Digital Transactions News via email.

“Our research indicates that BNPL is most often used for large, and/or unexpected expenses. The appeal in BNPL is in its ability to extend credit instantaneously at the time of purchase when unanticipated expenses arise,” Prange says. “Because consumers’ use of the technology is most often unexpected, measuring planned, future usage of BNPL is challenging (i.e., consumers may report not wanting/planning to use it until the need arises).”

Gift cards are another popular payment-related option the TSG/ETA research found that 71% plan to purchase gift cards this holiday season. Many—52%—intend to purchase store or retailer-specific gift cards, followed by 39% choosing restaurant gift cards, 35% opting for general purpose gift cards, 21% buying digital gift cards, and 20% choosing gaming and entertainment gift cards. Eight percent will shop for gift cards for themselves.

Gift cards continue to be a popular option, especially branded ones, for three main reasons, Prange says. There’s the perceived thoughtfulness that a closed-loop card may signal to the recipient that the buyer knows, or wants to influence, their preferences and tastes, she says. Other considerations may include promotions tied to the purchase and lower fees and ease of purchase.