Since the health crisis, installment payment has gradually become part of our habits, whether consumers or merchants. A practice that attracts internationally, both in France and in our European neighbors. Decryption.
An expanding market in Europe
Its use mainly concerns online commerce: according to Younited, a European instant credit player that carried out a pan-European study dedicated to the challenges of fractional payment, of all French people who have already used fractional payment, 61% have done so. for online shopping. That’s slightly more than Italians and Spaniards, who are concerned, respectively, at 54% and 44%, but much less than Germans, who have 78% of using it through e-commerce. As you may have understood, the payment in installments does not only attract the French: its success can be seen throughout Europe, mainly (65%) in purchases of less than €800. In 63% of the cases, the refund was divided into 2 to 4 monthly installments.
However, in our European neighbours, refunds are generally longer: 54% of German and Italian split payment users spread their refund over 7 monthly payments. In Spain and Portugal, the trend is 49% and 40%. This is far beyond the proportion achieved in France, which is only around 22%. Likewise, the share of purchases above €800 is higher abroad, with 35% of French users compared to 40% of Spanish and Portuguese users, 54% of Italians and 58% of Germans. Values that are justified by the many interests of a longer repayment period for the French consumer. Indeed, if this is not necessarily the case in the countries bordering France, in France the smaller monthly payments have a limited impact on the budget. An advantage allied to the possibility of aligning credit maturity with the product’s use cycle, which also appeals to many families.
New consumer expectations
If French consumers have acquired in recent years very specific habits regarding payment in installments, their expectations on this subject are also well defined. But above all, we must keep in mind that our market is changing: purchases over €1,000 should account for 28% of installment payments in France in the next 6 months compared to just 13% today, always in line with the same study . An increase that involves the satisfaction of new expectations, therefore, which are already easily identifiable. Among them, there is the desire to access a wide range of solutions that cover both higher values and a greater number of monthly fees. But, according to the numbers, this criterion is not placed in the first place. Trust in the brand or website that offers an installment payment solution has already led 53% of consumers to use it. It should be noted that this factor remains the number 1 decision criterion for 42% of Italians and 39% of Spaniards surveyed, but is less decisive for 27% of Portuguese and 22% of Germans.
However, the reputation of a brand is not decisive to arouse confidence among French consumers, in fact, only 26% of fractional payment users chose this payment solution because they knew the brand that proposed it. And that number is sure to decrease in the near future, given the sheer number of fintechs embracing this niche. The ability of an installment payment brand to offer a safer experience because it is regulated, more homogeneous because it is international, more exclusive because it is innovative, will be essential.
Last but not least, when it comes to the effectiveness of the customer journey. A standard that companies will soon have to meet without delay: in France, 77% of installment payment consumers say the entire process took less than 3 minutes. However, this immediacy is not suitable for payments spread over long periods. In question, the number of steps required for bank and identity checks. In these cases, the customer experience undergoes a bad transformation. The main effort to be made for brands in the future will therefore be to offer a smooth journey to the customer and an express answer, which must necessarily be accompanied by the simplest possible verification of the solvency of the subscribers.
To learn more, download the white paper: Is payment in installments made for your e-commerce?