Just over a year ago, the world experienced an increase in need for convenient, fast and flexible payment options, with retailers realizing the importance of offering expanded options to shoppers in order to navigate the “new normal” of the COVID-19 pandemic. Installment payments – or buy now, pay later (BNPL) – is a phenomenon that gained significant momentum. Emerging as a simple feature at checkout, installments ultimately adds a new layer of flexibility in the consumer shopping experience, both in-store and online. It is no longer our parents’ layaway, but an increasingly common option for purchases of all sizes, and is growing its footprint quickly in the broader payments ecosystem.
Installments have been popular in markets like South America and Europe for a long time. In Brazil, 50% of all purchases made on credit cards are on installment payments.1 In fact, installments represent an enormous segment of the payments system globally. In 2019, it accounted for $1.7 trillion CAD in global payments volume, according to the Euromonitor International 2020 Installment Sizing Report, commissioned by Visa. Globally, it is growing in adoption 2.5 times faster than traditional credit card payments.2