Why Pay In Instalments: The Benefits of Split Payment
Innovative companies have recently introduced buy now, pay later (BNPL) services to meet the ongoing demands of global consumers.
These companies learned consumers want to purchase products and services, but prefer to utilise methods other than traditional credit cards.
As a result, companies are partnering with BNPL service providers, such as Zilch, to offer buy now, pay later options for their customers.
Some of these platforms, including Zilch enable shoppers to make purchases by paying 25% of the total price upfront; they’re responsible for paying the rest in instalment payments.
As this method of shopping rises in popularity, so do questions surrounding its use and benefits. Here’s a glimpse at some of the most common questions consumers have about BNPL service providers.
What are Buy Now, Pay Later Instalment Payments?
Buy Now, Pay Later instalment payments break a purchase price into smaller payments that are then paid over a set amount of time.
For example, Zilch offers shoppers the ability to complete a purchase through four instalment payments, each representing 25% of the purchase.
This means that shoppers pay for 25% of their purchases at checkout. They then make three more payments: 25% is paid two weeks after the initial purchase; another 25% is paid two weeks after the second instalment payment; the final 25%, the fourth payment, is paid two weeks after the third payment. By week six, the shopper has completed all four payments.
How Can a Shopper Spend Responsibly in Instalments?
Want to pay in instalments? Getting started is simple.
- Sign up for a BNPL service. For Zilch, visit payzilch.com or download the Zilch app.
- Shop online or in-person using your BNPL plan.
- To complete the purchase, pay via your Zilch account. At the time of purchase, you pay only 25% of the total price.
- Installment payments are established on your profile. You will be reminded that 25% of the purchase is due before each due date.
What Can You Buy Using Zilch?
BNPL services are available to meet the needs and demands of consumers around the globe and can be used across various industries. Payments via Zilch can be made anywhere Mastercard is accepted, both in-person and online.
Shoppers can explore the various options, which include:
— Fashion stores, such as H&M, Zara, ASOS, Nike, and JD Sports.
— Food delivery services, such as Uber Eats.
— Grocery stores and fast-food locations, such as Aldi and Iceland.
— Home goods stores, such as Ikea and Dunelm.
— Electronic stores, such as Apple and GAME.
— Beauty and wellness providers, such as LOOKFANTASTIC, Cult Beauty, and Treatwell.
— Experience services, including hotels.com, expedia.com, lastminute.com, and Disneyland Paris.
Why Pay in instalments?
Instalment payment is a form of lending — and at Zilch, responsible lending is championed. Here are some pros:
- No fees: Unlike traditional credit cards, most instalment plans are available at no cost to the consumer. This means no extra or late fees. Instead, BNPL providers, such as Zilch, enable users to split their payments into 4 over 6 weeks with 0% APR at thousands of participating stores. To shop everywhere else with Zilch, users can pay 25% and a transaction fee upfront and pay the rest over 6 weeks via Zilch Anywhere.
- More flexibility: When life happens, we want to engage. Instalment payments give individuals more options. Although they don’t need to say yes to everything, they can now say yes responsibly to those high-priority products and events, knowing that they can manage their cashflow and pay over time.
- Refunds are simple: When using a BNPL platform that offers instalment payments, shoppers can pay for a portion of their purchase upfront and still return the item if necessary. They simply need to send the item back per the merchant’s direction, and once the store accepts the return, Zilch will issue the refund to the shopper. If they choose to keep the item, they pay the following three instalments. If they decide to return it, they’ll get their initial 25% back.
How Can You Ensure Payment Is Completed on Time?
Here are four tips to reduce the chance of missing a payment:
It’s best to budget appropriately for an upcoming payment. Don’t let the term “budget” create anxiety. Instead, consider looking at the beauty of budgeting. Here’s how budgeting can help you be more mindful of your finances:
— It gives an overview of a person’s needs and wants.
— It helps individuals forecast their weekly spending.
— It gives individuals insight into how much they should allow for emergencies.
— It allows people to plan for meaningful life events.
Monitoring your spending habits is key. While instalment payments allow us to make purchases over time, we have to make choices that favour saving.
— Make time for things you love. Instead of spending your time scrolling on social media, do something that gives you a feeling of fulfilment. Spending your time on the things that money can’t buy will ultimately put you on the right track.
— Invest in yourself. Instead of spending erratically, spend time and effort building yourself up. There are dozens of sources online to help you build your skills. The bonus: The more skills you have, the greater the chance of landing a high-paying job you love.
— Turn your joy into a side gig. Make money doing what you love. Leverage one of today’s online platforms to sell your passion, whether it’s selling handmade items on Etsy or building a business through Upwork.
— Be tech and cash flow savvy: Track your spending and saving by using instalment payments. This can help keep your cash flow balanced while allowing you to get the necessary items.
3. Use Zilch
Zilch offers two sources to help shoppers avoid missing payments. First, Zilch users are able to check their open and completed transactions anytime when they go to “Purchases and Payments” on the Zilch website or app. Here, they’ll be able to see exactly when their next instalment payments are due. Second, if users need a brief extension, they can select “snooze” on their account to get a four-day extension. The Snooze feature can be unlocked for certain users only, and usage may incur a fee.
4. Spend responsibly.
Be sure to spend responsibly.
— Monitor your money. Try following the 50-20-30 model wherein you allocate 50% of your income for essential expenses, 30% for miscellaneous expenses, and 20% for savings. To get started, write down your income, then itemize expenses. This can give insight on how to budget for extra spending.
— Spend rationally rather than impulsively. Consider investing in quality and forgo cheap or little things. This is a great way to leverage BNPL and improve your habits. Quality items generally last longer, so in the long run, you can save.
—Keep it real. There’s nothing wrong with treating yourself, as long as you can afford it and you’re doing it for your own enjoyment. Spending a fortune to maintain an image and impress others is expensive and unnecessary.
— Look at the bigger picture. Enjoy living in the moment, but always be pragmatic. Knowing your priorities and saving for the future will put you in good financial shape.
Please spend responsibly, spending more than you can afford could seriously affect your financial status.
Credit is subject to status, 18+ UK residents only. T&Cs apply.
Representative Example for a non-eligible store: Based on a loan purchase of £400. The total amount of credit is £300. The total charge for credit is £2.50 (transaction fee). With an 0% interest rate, the total amount repayable is £402.50 paid over 6 weeks (including the 1st payment made at time of purchase of 102.50 inclusive of fee payment). The Representative APR will be 11.5%.