Online payments

Instalments allow consumers to pay for a purchase in parts. An instalment typically covers one purchase/order and multiple payments over time.

Instalments differ from a recurring payment because in recurring payments it is not a single purchase, but an ongoing service like bills or subscriptions. In an instalment transaction, a single transaction is sent to the issuer, which in turn splits the total amount into several monthly payments.

Instalment Types

There are two instalment types:

• issuer-funded (credit instalments)
• merchant-funded (regular instalments).

Issuer-funded (credit instalments)

• The bank issuing the card to the consumer offers the instalments to the consumer
• The bank charges the consumer's account in the agreed number of instalments and charges an interest
• The merchant receives the total purchase amount at once
• The issuer takes the risk

Merchant-funded

• The merchant and consumer agree on the number of instalments, free of interest fees
• The bank charges the consumer's account according to the instalment plan between the consumer and merchant
• Merchants receive payments as the bank charges the consumer's account
• The merchant takes the risk