How do I pay in installments on Shopify?

If you have an e-commerce site, Shopify or not, you have certainly already had customers who have asked you for the possibility of paying in installments on your store.

Indeed, the payment in installments is a service extremely appreciated by many customers.

So why deprive yourself ? You might as well install a payment system in installments on all e-commerce sites and the problem is solved! Especially with the widespread secure 3D which can sometimes lower the conversion rate.

Yes but no, it's actually much more complicated than that. Well, it was before. Indeed, as a merchant, you have to make sure that the customer will actually pay the deadline number two and number three of a payment in three installments. Otherwise, as much to say that you make 66% reductions to all your customers.

It may not be very good for the business or for your margin. It is therefore necessary to ensure that the customer will pay, that the credit card will remain valid, that it is not a fraud, etc.

What is installment payment?

Before going into explanations, it may be necessary to re-specify what payment in installments is and its different modes, whether for the end customer or for the merchant.

Payment in 3 installments free of charge

It is one of the preferred payment methods for Internet users. Quite simply, this means that for the Internet user, if he buys a product at €99 on January 1st on your website, he will pay €33 on January 1st, €33 on February 1st and €33 on March 1st.

He will of course only have one order, that of January 1st. It is just split into several parts on the payment side and no fees are applied to the user.

Payment in 3 installments

It's almost the same as the payment in 3 times without fees but in this case, the e-commerce site will apply fees on the payment.

Still in our example, the customer will place an order for a product at €99 and he will pay €34 on January 1, €34 on February 1, €34 on March 1. That is 3 € of additional costs in our example.

In the “classic” payment in three instalments, the customer pays a surplus to use the service.

Payment in 4 installments free of charge

This is the same as paying in 3 installments without fees, except that instead of splitting the payment into three installments for the customer, it is done in four installments.

For example, if the customer's order is €100, the customer will pay €25 on January 1, €25 on February 1, €25 on March 1 and €25 on April 1.

Payment in four instalments free of charge is still quite recent and not very widespread. However, it is often appreciated by Internet users because it allows you to offer many things without spending too much cash.

The term "free of charge" comes from the fact that for the Internet user (the customer) he will pay the same amount if he buys his order in cash (in one go) or in four instalments.

As banks generally charge fees, this amounts to saying that it is the e-merchant who “sponsors” the order.

It is therefore obviously free of charge for the end customer but not for the merchant.

Payment in 4 installments

The payment in four installments resembles the payment in four installments without fees, with the difference that the payment costs are this time borne by the end customer.

The fees paid by the client may represent all or part of the sum.

Payment in 10 installments or payment in 12 installments

Very similar to payment in 3 installments or 4 installments, payment in 10 installments or 12 installments, with fees or without fees, is widely used by certain brands such as Fnac to offer an additional service to their loyal customers.

Not very widespread on the web and in e-commerce at the moment because it requires a level of paperwork and forms quite similar to consumer loans.

And obviously, the more monthly payments there are, the greater the risk for the e-merchant of not being paid in full.

Payment in installments is therefore a real headache.

In short, this means paperwork, fees, UX complexity for the customer and technical implementation costs for you, the e-merchant. But that was before Alma.

Do you know Alma?

Alma proposes to take care of all that for you and to guarantee payment for all the transactions that your customers will make. So you no longer have to worry about non-payments!

It is therefore guaranteed payment in installments . And that is a real revolution. We're not lying, it's written roughly on their site:

How does Alma work?

If you have ever discussed payment in installments with a bank, you know what comes out of it: it is long, complicated and if there is a problem, it is you as the merchant who will have to assume the non payment.

Alma has another approach: it is an algorithm that analyzes your orders and your customers to detect fraudulent behavior on its hundreds of customers.

It is Alma who will take the risk at his expense to completely free you from the stress of payment.

A yes and in addition it can be added in a few clicks on your Shopify store of course.

Alma's promise is therefore absolutely insane: you, as a merchant, receive the money as soon as the customer has placed an order and it is Alma who is responsible for recovering the various deadlines on the customer's credit card.

This certainly explains the monumental success that Alma is doing with regular fundraising (more than 41 million euros raised in January 2021) and very good growth. Alma is certainly a future French unicorn.

In short, Alma is simple for the end customer, simple for the merchant and without financial risk . They don't even have to pay for a subscription!

How does Alma get paid?

Alma's business model is super simple, they take, like all other means of payment, a commission on each sale made on their platform.

If your customers pay through Alma, Alma pays you the money less their commission. The price of the commission varies according to the size of your merchant site but you can find the information here on the Alma site.

Above one million euros in turnover per year, it is possible to negotiate a reduction in commission rates. Do not hesitate to contact them on our behalf if this is the case for you, or to send us a short message. We will put you in touch with our connections at Alma.

When should you use payment in installments on your Shopify site?

So, ok Alma is great, but is payment in installments worth installing on your e-commerce site? On Shopify, the question hardly arises because it's so easy to install. And if your customers don't use it, it won't cost you anything. And if your customers use it a lot, well you will easily boost your merchant site!

But more seriously, here are some good reasons to install an instalment payment system like Alma on your merchant site

When customers ask you!

It is obvious. If some of your customers or prospects are already asking you for payment in installments, then go for it! Installing Alma on Shopify costs you nothing and can bring you new customers and new conversions.

To install Alma on Shopify, go to the official Alma website: getAlma.eu

When you have a large average basket

If you had not yet considered payment in installments but you have a large average basket, more than 100 or 150 € for example, it is also worth trying.

Indeed, in this period of crisis, the conversion rate of merchant sites is impacted by the financial means of customers. Offering a payment method that respects their wallet (remember, they will pay the same amount) is, in my opinion, a gesture that can allow more people to convert.

When you want to boost your conversion rate

Precise and quantified studies on the correlation between the conversion rate and payment in installments are still lacking. So saying that installing a payment method in installments on your Shopify site will increase your conversion rate is more of a feedback on our part.

The more you lower the barriers to payment and objections (such as: it's too expensive), the more you will be able to encourage customers to make a purchase.

Department stores and major brands have understood this with payment offers in installments to boost their turnover in the most interesting periods for them.

Why couldn't you do the same with your e-commerce site?

When you want to increase your average basket

The good thing about paying in installments is that it also allows you to inflate the average basket. Indeed, it is easier to make big baskets if you pay in several installments, especially free of charge.

We often try to improve our ergonomics on the site to boost our average basket, but services and payment methods can participate.

Of course, this requires displaying everywhere on the site, such as on the product sheet for example, that payment in installments free of charge is possible. Installing a service of this type without communicating is useless.

Summary of payment in installments

If you like Shopify, it's certainly for the ease of use it gives you. Every day you can work on your customers instead of dealing with technical problems.

Well Alma managed to do the same thing on the payment in several installments and believe me, it was not easy!

There is no reason today to deprive yourself of the potential of payment in installments on your Shopify site. It's simple to install, no hidden costs and what's more customers love it.