Things are moving in the field of online payment. Until a few years ago, no e-commerce site offered a payment facility at the time of purchase with payment in installments or payments by credit card.
With the explosion of online shopping, Fintech players and entrepreneurs have started to look at guaranteed installments or more simply called installments. And moreover for nearly two years, customers of online sales platforms seem to overwhelm this new method of payment.
Paying for a pair of glasses, a video game console or shoes in 4 installments free of charge with an ordinary bank card is fast becoming an ordinary act of purchase. Iconic companies in the finance sector such as Cetelem or Cofidis offer this payment solution, as do subsidiaries of large distributors.
In addition, this mini revolution in the world of e-commerce has seen the emergence of new players. This is the case of the French startup Alma, which wants to establish itself as an alternative payment solution and fully intends to find a place in this ultra-competitive business sector. We tell you more in this article about this payment solution.
What Is Payment in Installments?
In France, the beginnings of payment in several installments go back to the beginning of the 2010s and the passage of the “Lagarde” law which subjects credits of more than three months to a strict list of rules even if it is possible to have a immediate response in principle: establishment of a file, a contract, obligation to advise, etc. To escape this, large distributors such as Carrefour and Casino have chosen, through their banking subsidiaries, to develop a simplified means of Israel Email List payment in several installments in order to avoid these constraints.
The guaranteed split payment is quite simply the possibility for customers who make purchases in an online store to pay in 3 or 4 installments, without this being penalizing for the sellers (risk of unpaid, etc.) and that the consumer has to bear the cost of a long-term credit. However, this type of payment has to be paid, of course, and even if the consumer has the impression of making a purchase with a kind of zero-interest credit, in reality it is considered that these payment facilities can cost 2% more on three months and even more over extended periods, depending on the service provider chosen.
On the seller’s side, it is important to specify that the latter pockets the entire order from the first payment made by the buyer. It is the seller’s financial partner who will take care of the rest, that is to say the withdrawal at maturity on the buyer’s bank card and possibly payment problems.
This attractive solution for paying for purchases is likely to grow exponentially, as it has been found to have a strong influence on consumer choice. Moreover, almost 60% of French people had already tested this solution when making a purchase at the end of 2019.
Marc Lanvin, managing director of a subsidiary bank of a French mass-market giant, firmly believes in the future of this payment system, because, according to him, “it can make it possible to make enormous sales volumes, which is the essential in this sector of activity ”.
Promises for E-Commerce Stores
If you have an e-commerce store in one of the following fields: optics, clothing, travel, technology, jewelry, know that this type of regulation is highly appreciated by consumers. Currently, only large online sales platforms offer payment in installments, but soon, individuals will be able to integrate this option into their online store. Play Plug, for example, is a product offered by Oney, an online bank and subsidiary of retail giant Auchan, and it will be available soon. Here are some figures that tend to indicate that guaranteed installment payments will take on a considerable dimension in the future, to the delight of online stores:
Over 70% of people believe this payment solution could encourage them to shop online.
90% of buyers believe that a payment in 3 or 4 installments will lead them to return to the same e-commerce site. It is therefore a factor of loyalty.
We can consider that this unprecedented means will inflate the size of the average basket by about 15%.
Recent analyzes also show that split payment increases the conversion rate, that is, the number of visitors who will have taken an action on one of your pages, such as clicking on a product or an advertisement.
All this explains the current enthusiasm for this innovative payment solution which represents one more way to support the growth of its online business, with a boosted turnover.