Voice of the Industry

Instalment and pay later options call for simplicity and ubiquity

Tuesday 30 July 2019 08:55 CET | Editor: Melisande Mual | Voice of the industry

Gil Don, CEO and co-founder of Splitit: “We have focused all of our instalment and pay later products on two factors: ubiquity and simplicity.”

The proliferation of instalment options in today’s payment space proves how attractive such solutions have become. Merchant and consumer uptake, along with new market entrants, underscore that this segment is reaching a new level of maturity. Benefits, such as higher shopper loyalty, lowered acquisition costs, and increased Average Order Value, are now well-understood.

However, the current saturation also creates confusion. For merchants, there are now many choices when choosing instalment payment providers. For shoppers, checkout experiences can differ from merchant to merchant. As a result, at Splitit, we have focused all of our products on two factors: ubiquity and simplicity.

Simplicity offers enormous benefits to merchants. In a world of growing customer acquisition costs, losing purchases unnecessarily is increasingly costly. Aside from price, speed is the most important factor in converting a visitor to make a purchase. With Splitit, the consumer has the fastest possible checkout experience. Splitting a purchase happens in split seconds. There is no irritating signup process asking for additional information, such as contact details, date of birth, or other forms of application credit check information. As a result, there is no resistance to the ‘buy now’ mentality that shoppers have once goods are in their cart.

Simplicity also gives access to an important segment of shoppers – those who feel unwilling or unable to take out additional credit on top of what they already have, and those who want to manage their existing credit usage carefully without using too high of a percentage of their credit limit. Credit-sensitive shoppers can be a valuable segment, but only when given the opportunity to purchase. Splitit’s proprietary model works for these shoppers even for larger ticket items.

In fact, Splitit’s consumer research has consistently shown that significant percentages of shoppers do not want to undergo any kind of credit check. They also have concerns about annual percentage rates (APRs) and potential late fees.

35% of shoppers say they are more likely to make a purchase if offered the ability to pay in interest-free monthly instalment payments;

25% of online shoppers would increase the size of their purchase (ie their Average Order Value) if they had the option to choose interest-free monthly instalment payments.


The way Splitit opens access to these sizable consumer segments is by leveraging shoppers’ existing cards. This eliminates credit checks and signup processes. Shoppers do not need to change their behaviour or make uncertain decisions at the point of purchase. They do not incur additional APRs, membership fees, or late fees. In fact, 0% of Splitit’s revenue comes from the consumer.

By focusing on simplicity, Splitit also reduces the overhead for merchants. Our instalment product lowers the total costs associated with accepting and processing payments. It also avoids the unintended consequence that shoppers can become frustrated with the merchant if late fees are incurred by the payment arrangement, which in turn lowers loyalty and increases customer service costs. In addition, our pay later product helps merchants manage products with a high return rate, without having to provide an additional level of customer service or manage the cumbersome, costly process of refunds.

Perhaps most importantly, our focus on simplicity means merchants do not take on the risk of non-payment. Ubiquity benefits both merchants and shoppers, too.

First, ubiquity means making payment options available both via ecommerce and in-store. Payment providers are slowly coming up to speed and integrating with in-store Point of Sale systems. At Splitit, we prioritised this seamless experience in our products. It helps merchants limit the impact of ‘showrooming,’ where consumers browse in-store and buy online, lowering the efficiency of spending on real estate, staff, and operational overhead of running a physical store network.

Second, many instalment payment providers are only available in select countries. This forces merchants to choose to restrict instalment options to those countries where their payment provider offers service. Global reach is often an essential factor for any merchant choosing a provider. The Internet has clearly made shopping a more and more borderless phenomenon that merchants in many product categories can tap into. Research shows over 50% of shoppers in some countries are interested and willing to make cross-border purchases, for example.

The value of Splitit’s model is borne out by its results.

85% of purchases are approved because the approval consists of simply checking the credit card limit card balance. This rate is higher than other instalment providers that require application for approval;

Splitit merchants see as much as 80% higher Average Order Value and a 12% increase in sales after implementing Splitit. These increases maximise the value of customers once they are acquired;

Shopping cart abandonment, which remains a significant challenge in the world of ecommerce, goes down by 11 percentage points on average across Splitit merchants. This reduction increases the ROI of ad spend and other customer acquisition.

Simplicity and ubiquity will undoubtedly remain key considerations as the payments market continues to evolve into the next decade. We’re looking forward to seeing what’s ahead, as well as leading further innovations to address merchant pain points along the way.

This editorial was first published in our The Payment Methods Report 2019 – Innovations in the Way We Pay. The report presents the key trends and developments in global and regional payment methods by highlighting the innovation, challenges, and developments in the use of the most important payment methods across geographies and verticals.

About Gil Don

vspace=2Gil Don is the CEO and co-founder of Splitit. He holds over 20 years of experience in sales and management for US corporations, previously serving as the Country Manager of Veritas Technologies. Prior to this, he served as Regional Manager for one of Dell EMC’s product divisions where he was responsible for driving sales, building customer relationships, and establishing additional channel partners.

About Splitit

vspace=2Splitit is a payment method solution enabling customers to pay for purchases with an existing debit or credit card by splitting the cost into interest and fee-free monthly payments, without the need for additional registrations or applications. Splitit’s global footprint extends to hundreds of merchants in 27 countries.

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Keywords: Gil Don, Splitit, instalment, pay later, online payments, payment method, merchant, credit, cross-border shopping, credit check, ecommerce, point of sale, credit card, cart abandonment
Countries: World