A business should offer different payment methods when completing a purchase . In addition to reducing the percentage of cart abandonment, it allows the customer to How does installment the best option to pay for the product or service .
One of the most common ways is to pay in installments. According to a survey conducted by the National Confederation of Retail Managers (CNDL) and the Credit Protection Service (SPC), it is estimated that around 62.3 million Brazilians currently have installment payments.
There are several ways to offer installment payments to customers. With that in mind, throughout this article, we will detail how installment payments work and the advantages of offering them , as well as the most common methods on the market.
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What is an installment plan?
Installment payments consist of dividing the total amount of a purchase into smaller payments . This way, the consumer does not have to russia whatsapp number data for the entire product or service at once.
Installment payments can be a good option for consumers to make purchases with higher amounts , fitting them into their monthly budget. Or for those looking for the rewards of credit cards.
As it is one of the most widely used payment methods by Brazilians , installment payments can be a good way to build customer loyalty , as it meets the needs of a group that seeks to pay in installments. Especially if the How does installment are also attractive, such as interest-free installments , for example.
Therefore, it is important to understand how this form of payment works , whether for consumers or for companies that offer installment payments.
What is the difference between installment and recurring payments?
Both methods involve monthly payments, but there is a big difference between installments and recurring payments . In the first, the technique that uses collaborative are divided into a single amount over several months . Once the amount is used up, there is no How does installment discount on the card.
In recurring payments , there is an automatic discount on the customer’s account when using the service . A common example is for subscription services, such as streaming, gym or even internet and telephone.
In the case of recurrence, every month, the amount is deducted from the credit card and, if there is no cancellation, the subscription will last beyond the usual 12 months of the installment plan.
How does installment payment work?
Payment in installments takes into account the Total Effective Cost (CET) of a purchase. If the installment plan is interest-free, the maldivian lads of the product will be paid in full, without any additional charges , divided by the number of installments chosen.
Generally, companies opt for a maximum installment of up to 12x interest-free . However, in some cases, interest may be charged, which will increase the final purchase value , making the CET higher than the value of the product itself.
Sometimes, interest is already included in the value of the product that will be paid in installments, and therefore there may be discounts for paying in cash . The installment plan works more or less like this:
- Interest-free installment payment : the total amount or CET remains the same, whether paid in cash or in installments. Thus, when purchasing products worth R$1,000 in 10 installments, the installments will be R$100.
- Installment payment with interest : there is an amount to be added to the total amount of the product. For example, with interest of 2% per month, the total monthly installment will be R$111.33. In other words, the product’s CET will increase by R$110 at the end of the payment.
How does installment payment work?
In general, companies do not receive payment in full , regardless of the payment method. The establishment may receive the amount in installments . Although this determination may vary depending on the card machine operator.
However, there is a current modality that allows the early receipt of these installments, the anticipation of receivables .
Asaas offers this possibility to legal entities , both for payments by credit card and bank slips.
Although advance payments have fees, they can be advantageous for cash flow or for unforeseen situations. It is a good option compared to loans, for example, since it has lower interest rates.
