Woman holding a phone and waiting near a stair case.

Instalments: consumers can buy now and pay later

Instalments: consumers can buy now and pay later

Offer your customers instalment payment plans on an API-based solution or on existing international standards.
Stay informed

Visa has developed instalment solutions

Visa has released capabilities on Visa Developer Portal to allow clients to develop and pilot instalment experiences to offer to their customers.*

*Availability is subject to factors outside of Visa’s control, including participation by issuers, acquirers and merchants.

Introduction to instalment payments

‘Instalment payments’ (instalments) refers to the option to pay for purchases over time by dividing the purchase amount into smaller equal payments. Consumers will typically use instalments to buy medium and large-ticket items (e.g., electronics, furniture). But in some markets, they may even use them to make everyday purchases (e.g., groceries, retail). So, what’s the key benefit for consumers with instalments? They get to spread their purchases, including transparent fees, into periodic (usually monthly) repayment amounts.

The following example shows how instalment payments work for a large-ticket purchase of $800 paid for over 4 months, 0% fees:

Donut chart showing 1 out of 4 payments.

Paid $200

First instalment

Donut chart showing 2 out of 4 payments.

Paid $200

Second instalment

Donut chart showing 3 out of 4 payments.

Paid $200

Third instalment

Donut chart showing 4 out of 4 payments.

Paid $200

Fourth instalment

Common instalment payments models

There are two primary models in the global instalment payments landscape: During Purchase and Post-Purchase. These models differ by when the consumer is offered instalments, who presents the instalment payments plan and who pays for the cost of providing credit.*

*Financial institutions are solely responsible for their own instalments programmes.

During purchase

Consumer prompted at merchant check out to pay in instalments

Post-purchase

Consumer converts a recent card transaction into instalments

Visa’s instalment solution can provide benefits to all parties in the ecosystem

Note: depicts conceptual vision in development; features, functionality and availability are subject to change. Issuer is solely responsible for its own instalments programme.

Instalments are a large and growing opportunity

Globally, instalments represented $1.6 trillion in market value in 2020. And it’s growing quickly – up 5% YoY. In contrast, credit card expenditure declined by 4% globally.
Growth in installments in different sectors. See the detailed image description.

Global instalments market size

Note: 2020 global instalments market size ($1.6 trillion) excludes $1.02 trillion in untraceable instalments volume (e.g., “debt consolidation”). Growth in global instalments and credit cards shown as year-over-year increase in payments volume in 2019 vs 2018.

Source: Visa-commissioned study performed by Euromonitor September 2021

 

Sign up to get regular updates on Instalments

Stay informed