Want brand loyalty? 40% of Europeans won’t settle for less than flexible payments

By Gloria Methri

As cost-of-living pressures continue to impact European consumers, a new report from Aion Bank and Vodeno reveals that 40% of consumers would remain loyal only to brands offering embedded financial products, such as Buy Now Pay Later (BNPL) and cashback.

This trend is especially pronounced among 25–34-year-olds, with half (50%) of this age group expressing a strong preference for brands that offer these flexible financial solutions.

Flexible Payments Influence Consumer Loyalty

The growing demand for flexible payment options is reshaping the way consumers interact with retailers. Embedded finance, which seamlessly integrates financial products into the shopping experience, is becoming increasingly critical in maintaining customer loyalty. In a time when inflation and economic uncertainty have made financial flexibility a top priority, offering buy now, pay later (BNPL) options provides customers with a convenient way to manage their spending without incurring hefty upfront costs.

For retailers, this shift is more than just a trend—it’s a necessity. 70% of Europe’s top 50 non-food retailers now offer BNPL options, making it the third most popular payment method after debit and credit cards. BNPL services, such as “Pay in 3” and similar offerings, have quickly become standard features, with brands recognising their ability to enhance the customer experience and boost sales.

Retailers that fail to offer these payment options risk alienating a significant portion of their customer base. According to the report, those who incorporate embedded finance solutions, such as buy now, pay later (BNPL) and cashback, experience greater customer engagement. Specifically, 36% of consumers return to a brand’s platform up to five times a month, compared to once a month for those who don’t offer such features.

A Gap in Payment Methods

However, the survey also highlights a notable gap in the market. While digital wallets like PayPal (84%) and Apple/Google Pay (62%) are widely adopted, A2A (account-to-account) transfers, which offer instant payments and reduce transaction delays, are still underutilised. Only 18% of retailers provide A2A transfers, with just 4% enabling mobile A2A payments via one-time push notifications. This presents an opportunity for brands to innovate further and cater to the growing demand for faster, frictionless payments.

Neil Chandler, CEO of Aion Bank, emphasised the importance of these trends, saying, “Customers expect choice when shopping online, and if the payment experience doesn’t match the customer journey, they will take their business elsewhere. Offering the right payment solutions not only enhances the shopping experience but also fosters long-term loyalty.“

As embedded finance continues to evolve, retailers must adapt to these changing consumer preferences, offering tailored solutions that meet the demands of the modern shopper while ensuring responsible lending practices are in place.