Introduction to Payment by Installment
Payment by installment refers to a sum of money being paid in small amounts over a fixed period of time (i.e. monthly payments). The basic idea is to allow someone to make online partial payments.
This article will cover the following points:
- How payment by installment works
- What is required to use this option
- The advantages of paying by installment
- How to set up payment by installment for your membership campaigns
- Banking and additional information
How does payment by installment work?
Payment by installment consists of dividing the total amount of purchase into smaller, equal parts and distributing these parts over a set period of time.
Result: An expense that seemed out of your budget is now accessible.
You will be able to offer payment by installment for online membership campaigns.
Let's say you want to charge a membership fee of $400 in 4 separate installments, at monthly intervals, starting on August 7, 2020.
The installments will be as follows:
- 1st installment: $100.00 - 7 August 2020
- 2nd installment: $100.00 - 7 September 2020
- 3rd installment: $100.00 - 7 October 2020
- 4th installment: $100.00 - 7 November 2020
We will use this example for the rest of this article.
What is Required to Use This Option
- The nonprofit's e-wallet account must be created and verified by a payment partner.
- Must be a registered nonprofit (with 501(3)(c) status.
The Advantages of Payment by Installment
The advantages for the nonprofit organization
- Build loyalty and personalize relationships with members
Offering payment by installment can help nonprofits both retain and recruit new members.
By offering easy payment solutions, nonprofits can create a climate of trust among their potential members who have not yet used this service.
- Increase sales volume of services
It also allows members to purchase more services at the time of purchase.
- Strengthen the sales cycle
Offering payment by installment gives an incentive for potential members to take action. It lowers the initial cost by staggering the payments, which can facilitate immediate decision-making and purchasing.
Advantages for the members
- Members have the option of not paying the total amount when purchasing a membership
- With large purchases spread over a set amount of time, the financial burden is not as strong on the member
- Despite a potentially complicated financial situation, the members can manage to stabilize their budget and maintain their purchasing power