*Availability is subject to factors outside of Visa’s control, including participation by issuers, acquirers and merchants.
Visa is developing installment solutions
In the near future, Visa will be releasing capabilities on Visa Developer to allow clients to develop and pilot installment experiences to offer to their customers.*
Introduction to installment payments
Installment payments (installments) refer to the option to pay for purchases over time by dividing the purchase amount into smaller equal payments. Consumers will typically use installments to buy media 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 installments? They get to spread their purchases, including transparent fees, into periodic (usually monthly) repayment amounts.
The following example shows how installments payments work for a large ticket purchase of $800 paid for over 4 months, 0% APR:
Paid $200
1st installment
Paid $200
2nd installment
Paid $200
3rd installment
Paid $200
4th installment
Common installment payments models
There are three primary models in the global installment payments landscape: Pre-Purchase, During Purchase and Post-Purchase. These models differ based on when the consumer is offered installments, who presents the installment payments plan, and who pays for the cost of providing credit.*
*Financial institutions are solely responsible for their own installment program.
Pre-purchase
Consumer opts-in for installments pre-purchase
During purchase
Consumer prompted at merchant checkout to pay with installments
Post-purchase
Consumer converts a recent card transaction into installments
Create plan
API for issuers to create installment plans. Issuers to define plan attributes such as:
- Duration of installment plan
- Participating merchants and cards
- Interest (and fees if applicable)
Check eligibility
API for acquirers, technology platforms and merchants to look up eligible installment plan(s) for an installment transaction. Merchants can display eligible installment plans to an eligible cardholder during purchases.
Example: 6 month installment plan for all eligible Visa cardholders from Bank A at home appliance stores
Select plan
API for merchants to confirm the cardholder selected installment plan for a given transaction.
Convert plan
API for issuers to convert the original transaction into an installment plan.
Schedule plan
API for issuers to schedule payments of installment transactions. The service will look up cardholder status and calculate monthly installment payments due, so that issuers can manage general ledger and post to cardholder statement correctly.
Installments Enabled by Visa can provide benefits for all parties in the ecosystem
Consumer
Merchant
Financial institution
Acquirer
Note: Depicts conceptual vision in development; features, functionality, availability are subject to change. Issuer is solely responsible for its own installment program.