More and more people do not have a regular monthly income. People switch jobs more often, go from project to project, or work in the gig economy altogether. As a result, the timing of larger bills or purchases becomes problematic. I need to pay or want to buy now… but I can’t right now. This is where supporting Partial Payments can help. Especially if you can seamlessly incorporate it into your flow, without it becoming a credit facility.
While cash flow remains crucial for businesses, it does increasingly compete with commercial metrics like customers signed or retained. After all, more customers means more data, it attracts more investment, and cash is not earning any interest these days anyway. Moreover, businesses compete on customer experience. Which is about convenience, part of convenience is flexibility, and when and how you can pay is a crucial form of flexibility.
Enter Partial Payments.
Paying for things in parts is nothing new, whether in advance or after the fact.
So what’s new? A specific wrinkle is here is whether or not something constitutes a loan. That makes the business a lender, with all sorts of regulatory obligations as a result.
However, in many (European) countries a business can divide a customer’s payment into 3 installments without becoming a lender. The United Kingdom even allows 7 installments. Used the right way, Partial Payment essentially becomes a payment method to give people some breathing room. Without adding any complexity for the merchant, who leaves that to someone like us.
Examples
But really, the concept can be used for any higher-value purchase or bill to accommodate customers. Just today a retailer with a dozen locations approached us to support a payment link in down payment invoices sent to customers ordering remotely, so that our real-time status updates dramatically speed up their ability to place the order. The rest of the overall invoice can be requested and paid on delivery. And yesterday we were approached for… funeral homes, who of course deal in large unexpected costs for their customers who in many countries do not have insurance for that.
Industry Standard
Interestingly, initiatives in both the UK and the EU are underway to codify what we do for a living into a technical standard called Request To Pay (RTP). It’s a model to govern the possible interactions between a biller and a payer. It primarily aims to enable smooth payment straight from bank accounts, but also acknowledges various other needs including this one. Pay in parts.
Standards take years however – why wait? Make customers happy with your great product or service, and let the money sort itself out. With a bit of help from your friendly RTP vendor.