Offering installment payment on your marketplace: is it essential?

Technological advances have played a key role in the evolution of deferred payments by facilitating the payment process for a better user experience and risk management. Payments in instalments have evolved over the years to become one of the most popular payment options in consumers' daily lives. Generally speaking, customers have the option of being financed and repaying their purchase monthly in 3, 4 or 10 instalments.

The flexibility of this payment method means that users can spread the cost of their purchases over several months, rather than having to pay in full at once. This accessibility is appreciated by consumers, as it gives them different options. Shoppers are therefore more likely to return to the merchant site to use this type of payment.

How do I pay in instalments?

Buyers are offered the option of paying in instalments online at the time of payment. The first instalment is payable immediately, and the other instalments are payable at monthly intervals.

 

Please note that a payment in several instalments may be refused. 

Some payments may be refused due to the nature of the customer's bank card. Systematic authorisation cards such as Electron, Maestro, prepaid and virtual cards do not allow this possibility. 

A payment in several instalments may also be refused by the financing organisation if the scoring applied to the applicant for the payment facility does not give a conclusive result. The user scoring applied by the credit organisation is linked to its own criteria, which may be linked to the user's bank, operator or bank card, as well as many other financial or non-financial control points.

Payment in instalments may also be refused if the consumer's bank card expires before the last instalment of the payment schedule.

What are the benefits for consumers?

Fractional payment is a real asset that enhances the consumer's shopping experience, allowing them to spend money they might not have been able to afford in a month. This method of payment reduces the direct impact on the buyer's bank account. More than 1 in 3 Europeans* have already paid in several instalments or made a deferred payment. This method of payment has therefore become part of consumer habits. In France, almost 30%* of consumers pay in instalments. 

Paying in instalments is popular with consumers because it offers a flexible payment solution tailored to their financial situation. And for good reason, 60%* of consumers say they are prepared to change retailer in order to have access to this service.

It is also worth noting that 69%* of French people who use payment facilities would be prepared to change retailer in order to benefit from them. This demonstrates the popularity of this method of payment. 

Paying in instalments increases consumers' purchasing power 4-fold. Thanks to this method of payment, consumers can increase the number of items they buy on the platform, and therefore the size of their shopping basket.

What are the advantages for marketplaces?

When the consumer chooses this method of payment, the seller receives the full amount of the finance in a single payment, ensuring that he is paid for the sale. The credit organisation takes care of collection.

Offering an optimal shopping experience helps to build user loyalty.

Thanks to this payment method, the conversion rate increases, since split payments encourage the act of buying and increase the average basket.

How do you ensure that consumers pay?

Multiple payments are made automatically. Before validating this payment with the buyer, the bank or PSP (payment service provider) that provides the solution ensures that the buyer has a sufficient balance at the time of purchase and is eligible for financing through scoring.

If the consumer chooses to pay in instalments, the marketplace clearly displays the financial terms and conditions of the financing, as well as the precise payment schedule that the buyer will have to follow to repay the payment facility.

Several methods are used to minimise the risk of payment default, including internal scoring tools, in addition to those used by the financing organisation, as well as security rules relating to user behaviour and verification of contracting parties' identities.

Is this payment option regulated?

The inclusion of payment in instalments on your marketplace is effectively regulated in France by the Scrivener law. This law requires marketplaces to provide clear and transparent explanations of payment terms to consumers. It also guarantees users' rights in the event of a dispute.

Pay in instalments with Obvy

Make it easy to pay in instalments. Our payment and transaction management solutions natively integrate deferred payment, as well as 3X, 4X and 10X payment by bank card, in partnership with FLOA (BNP Paribas Group), the leader in split payments with over 3.6 million customers. With Obvy, improve your customers' purchasing power, encourage higher average shopping baskets and increase your conversion rate, by avoiding long and costly developments.

Data taken from the Kantar study: Payment habits of Europeans, for FLOA*.