Global payment solution provider Splitit sheds light on the growing popularity of general-purpose credit card installment plans among both merchants and consumers.
Merchants are increasingly adopting these payment options, citing benefits such as reduced declined transactions and faster processing times.
However, discrepancies exist between merchants and acquirers regarding the timing of offering installment plans during checkout. Consumers, especially those with higher incomes, are utilising installment plans for better spending management, often preferring them for larger purchases.
A Splitit and PYMNTS Intelligence report, Divided, Not Conquered: Acquirer and Merchant Confusion Clouds Split-Payments Landscape, finds that 78 per cent of merchants intend to improve, or are currently improving, their ability to accept these payments.
Forty-eight per cent of surveyed merchants point out fewer declined transactions and faster processing times as benefits of card-attached installments, while 44 per cent of surveyed acquirers highlight greater transparency in payment processes. Additionally, while nearly one-third of merchants anticipate increased consumer spending with general-purpose credit card installments, 76 per cent expect a rise in consumer usage of card-attached installment plans.
Nandan Sheth, CEO at Splitit, said: “Although some disconnects between merchants, acquirers, and consumers were found in the report, the future is very bright for card-attached installments. We know that providing a white-label card-based solution, such as Splitit’s, is appealing to a broad range of highly qualified shoppers with, on average, higher FICO scores and fewer delinquencies overall.”
Further findings
The survey reveals significant disparities between merchants and acquirers regarding installment plans, including consumer preferences and timing of offering options. While 50 per cent of acquirers claim to support general-purpose credit card installment plans during checkout, analysis shows it’s closer to eight per cent.
Additionally, 30 per cent of merchants believe consumers prefer early payment option disclosure, but 66 per cent of shoppers want to see options before deciding. Only four per cent of merchants offer pre-checkout installment plans, missing out on potential sales boosts and competitive advantages, according to 100 per cent of surveyed merchants aiming to implement pre-checkout plans.
Splitit stressed the need for merchants and acquirers to adapt split-payment offerings to evolving consumer preferences. Enhancing payment systems to accommodate more credit-card-based installments and offering transparent payment options earlier in the buying process can optimize sales and enhance customer satisfaction.
