Quadpay and Splitit offer installment payment plans in new markets – Footwear News

When installment payment services began to take hold in retail last year, they had a huge impact on the credit card market. But the latest evolution in payment alternatives could change the way consumers – and businesses – pay for their goods even more.

The most successful payment service companies offer similar promises to consumers: pay 25% upfront for purchases, receive the item, and then pay the balance in three additional interest-free installments. But such a similarity between large companies has created confusion for consumers – they either have to use the service their favorite retailer has partnered with or none at all. It also forces buyers to track and make payments on multiple accounts.

Likewise, retailers have had to either partner with various companies or forgo the large part of the market that uses competitors for their payment services.

QuadPay is tackling this problem with its new product: the Visa QuadPay card. Like a debit card, it can be used at any online retailer – not just those who are QuadPay partners – and at any store that accepts Apple Pay or Google Wallet. This allows consumers to split all of their purchases into four installments, with a flat fee of $ 1 per installment at any non-participating retailer.

“While we have a wide selection of sites that consumers can buy from for free, customers pay a little extra so they can shop wherever they want with QuadPay,” said David Sykes, COO at QuadPay. “Banks charge $ 3 just to withdraw money from an ATM. We offer much more than that for a similar price.

The company, like its competitors, derives most of its revenue from billing merchants as a percentage of each purchase made through QuadPay; customer charges are one way to recover that. In return, consumers who use a single service only have one account to monitor and are able to create a stronger payment history, unlocking higher spending limits.

The Visa card model also serves as an overview of the benefits of QuadPay for merchants who are not yet business partners. QuadPay executives believe that once retailers see the traffic generated by an installment option, they will want to sign up.

In-store checkout options are expanding more and more to accommodate changing customer preferences.

CREDIT: Mark Schiefelbein / Shutterstock

The retailer can then use the QuadPay branding on their site, integrate the payment option on product pages and be promoted within the QuadPay mobile app, which helps consumers find other places. to shop and boosts mobile sales. According to QuadPay, its business partners are seeing an average increase in order value of at least 20%.

“When we show retailers that transactions are already being processed through their online and physical stores with QuadPay, it reinforces the value proposition we bring,” said Sykes.

A year after their inception, the value of installment payment services has been recognized by many consumers and retailers, but has been largely limited to this B2C market. From now on, companies in the B2B space will also be able to use the installment payment system via the Business solution from Splitit.

“The $ 120 trillion B2B payments market has suffered from a lack of innovation for decades,” said Gil Don, co-founder and CEO of Splitit. “Splitit Business Payments resolves long-standing inefficiencies and frictions in the way small and midsize buyers and sellers do business. “

Splitit differentiates itself from other payment solutions by allowing customers to choose the number of installments they need, but also by requiring that a hold be made in advance on the customer’s credit card for the full amount. While this reduces risk for all parties, it provides less flexibility for clients; Splitit promotes itself as a budgeting tool rather than a layaway program.

Ron Kenigsberg reviews the Miz Mooz product at the brand’s New York showroom.

CREDIT: Miz Mooz

The new B2B proposition works the same way. Using existing Mastercard or Visa accounts, merchants and buyers can split their purchase orders into a series of payments, on terms agreed between them and the manufacturer. These terms also determine when an order ships – it can be shipped immediately, after two payments, or in a chosen month, for example. Splitit pays the manufacturer the full amount in advance and assumes the risk.

For many small businesses, the timing of ordering products and managing inventory can cause financial hardship. By rearranging the payment schedule to align it with cash flow, merchants are free to place orders as needed.

“This is great for the trader, who gets the goods without taking money out of his pocket, and it gives us, the supplier, certainty of payment that improves our operations, providing a clear window into materials and planning. of manufacturing, ”said Ron Kenigsberg, president of footwear brand Miz Mooz.

Splitit has already seen some of its business partners become consumers under the new B2B model. Conversely, he hopes that merchants who start using Splitit with their supplier partners could then consider offering the solution to their own consumers.

“The United States is in the early stages of offering installment payments, especially considering how ubiquitous the model has become overseas,” said Sykes of QuadPay. “In 24 months, you won’t be able to point to a retailer that doesn’t offer a payout option.”

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Elaine R. Knight

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