Payment in several instalments in store: an innovative solution

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Common on online sales sites, payment in installments is also available in physical stores. For the consumer, the payment solution facilitates the acquisition of a product. For the merchant, it is an effective tool that increases sales.

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What exactly is the payment in several instalments in store?

Paying in instalments in a store consists of paying for a purchase in several instalments, generally one month apart, in physical points of sale. With the "Buy Now Pay Later" or BNPL system, customers can pay for their purchases in two, three or even four installments. Regardless of the payment method chosen, the duration of the system is generally less than three months. Some Payment Service Provider agents such as Pledg do offer loan periods of more than 90 days under certain conditions. Since the customer pays in installments, the term split payment is also appropriate. 

The banks use the concept of "PnF" or payment in N times. The customer pays the first fraction of the order on the day of purchase. The rest will then be spread over several installments. 

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Offer payment in installments in store 

Merchants do not directly manage the terms and conditions of the in-store multi-payment solution. The use of innovative financial technologies (fintech) backed by the merchants' PSPs is necessary.

In France, in order to act as an intermediary between the merchant and the payment institutions, the payment facility solutions provider must have ACPR (Autorité de contrôle prudentiel et de résolution) approval, which implies a number of obligations:

• Propose a secure payment interface for the buyer as well as for the seller or the e-commerce site;
• Commit to protecting the personal and financial data of users;
• Implement strong authentication systems to ensure transaction security.

Today, scalable payment facility solutions are available from some providers like Pledg. The system can be adapted to each merchant context, whether the activity is online or in-store, and regardless of the existing PSP, CMS or CRM. As the service is paid, the merchant must contract this relationship.

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Payment in several instalments in store: what are the advantages for your business?

In-store payment facilities have many advantages for the merchant. It protects the merchant's cash flow. It also has a significant impact on sales volume.

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A secure solution for cash flow

With the payment in several instalments in store, the merchant is paid immediately on the entire order even if the customer spreads his payment over several instalments. The system therefore preserves your cash flow. The merchant offers one or more payment facilities and it is up to the consumer to choose the duration of the loan. In the event of a dispute, the payment facility provider assumes the credit risk and handles all collection procedures.

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An increase in turnover

In-store multi-payment solutions are considered to be a real sales gas pedal. It is above all a factor that triggers the purchase, especially with hesitant customers. It is a decisive factor in the consumer's choice and increases the conversion rate. The merchant benefits from a significant competitive advantage that improves the credibility and the brand image of his brand.

Split payments have a positive impact on the quality of the shopping experience. The customer allows himself to spend a lot of money without exposing himself to risks such as banking. An Opinionway study shows that one out of four French people choose their merchant based on the availability of the 2 or 3 time payment solution.

Payment in installments increases the average shopping cart. The customer is inclined to pay more when the payment is spread over several installments. The merchant can then sell an item that the consumer would not have been able to afford with a traditional cash payment, while practicing upselling and cross-selling.

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How to offer payment in several instalments in store?

The implementation of multi-payment for professionals in stores does not require complex logistics. With the help of the payment service provider, the merchant optimizes the shopping experience, while enhancing his brand.

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A payment link

Setting up this payment system is relatively simple. The merchant sends a payment link to the customer from their interface or tablet. At checkout, the consumer selects to pay in installments in-store. He then chooses the number of monthly payments that suits him.

The consumer can pay in a corner set up for this purpose or by cell phone via a sales tablet in the store, which facilitates order taking and makes waiting easier. The receipt of the payment schedule by email confirms the payment.

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The payment process

To initiate the payment, the customer enters his credit card number. No file or administrative document is required. The verification of the consumer's solvency is done in real time from a scoring engine, from the credit card information, customer information and a number of data related to the use of the card. A postal address and a valid telephone number are required. A payment schedule is then proposed prior to the payment in order to inform the customer of the terms of this type of payment and of his commitment to repay the credit. The first monthly payment is made directly on the day of purchase. 

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Which bank card should I use to pay in instalments?

The solution of payment in several times in store requires a bank card CB, Visa or Mastercard. In the following cases, the request may be refused, particularly if the customer's bank card is not suitable. Cards with systematic authorization such as Maestro, Electron, Revolut or Compte Nickel are incompatible with this payment method. The same is true for prepaid cards and single-use virtual cards. The platform interrogates the card before issuing or not an authorization.

A bank card that expires before the last payment date prevents the customer from taking advantage of the payment in installments. The system cannot be used if there is a suspicion of fraud. By analyzing certain factors such as the time of the order or the nature of the purchase, the financial institution considers that the transaction does not correspond to the customer's consumption habits.

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