In the past, instalment payments were mostly tied to physical establishments partnering with financial institutions. However, the surge in ecommerce has prompted companies to diversify payment methods, meeting the varied needs of internet users. Alongside credit card or PayPal payments, the option to pay for purchases in instalments is gaining traction, necessitating a fitting payment module and robust internal organisation.
Everything you need to know about paying in instalments
Nov 28, 2022
What Are Instalment Payments?
Instalment payments enable customers to stagger their payments for purchases, breaking down the total amount into smaller, sequential payments. Commonly denoted as 3x, 4x, or even 10x or 20x payments, this method empowers customers, enhancing their purchasing capability and granting access to goods or services that might otherwise be financially challenging.
While traditionally associated with significant purchases, the popularity of instalment payments has grown, encompassing a broad spectrum of items. It's worth noting that, if the payment period extends beyond 3 months, French Consumer Code regulations come into play. For periods shorter than 3 months, statutory cooling-off periods do not apply.
In certain instances, instalment payment requests may face refusal. Customers encountering such situations should liaise with their financial institution to understand the grounds, typically related to financial constraints or suspected fraud.
Please Note: Despite the increasing prevalence of no-cost instalment payment methods, this is not always the case. Merchants or customers may incur costs, impacting the overall purchase amount.
Implementing Instalment Payments on Your Ecommerce Site
To offer instalment payments on your ecommerce site, the first step is to enlist a Payment Service Provider (PSP) like Mollie. Once integrated, select and install the desired payment methods on your site. Most payment plugins include an option for instalment payments, allowing you to decide whether to activate it. Mollie, for instance, facilitates instalment payments through the Klarna online payment solution, enabling customers to pay in 3 instalments at no extra cost.
Activation Process:
Log in to your Mollie account.
Navigate to your profile settings.
Access "Payment methods" on your site.
Activate "Pay Later / Pay in 3."
This can be easily managed with just a few clicks in your dashboard, providing flexibility to activate or deactivate the option.
Benefits of Offering Instalment Payments
The appeal of instalment payments lies in its numerous advantages for customers. Those with the option to pay in instalments gain better control over their budget, especially for high-ticket items. Offering this choice on your website can be a significant competitive advantage in times of declining purchasing power.
According to a study by Alma, instalment payments increase the average shopping basket by 60%, encouraging customers to add more products or upgrade. This could result in a 20% boost in sales for ecommerce merchants embracing this solution.
Moreover, providing diverse payment options instils confidence in customers, reducing abandoned carts, and boosting conversion rates and customer loyalty. Transparency is key – offering clear information on additional charges, payment schedules, and refund options fosters trust and enhances the overall shopping experience.
For seamless integration of instalment payment solutions tailored to your needs and customer expectations, the Mollie team is at your service. Whether using turnkey solutions or our API for customised setups, contact us to explore transparent and honest transaction fees, with no commitment period.
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