More for less?
Consumers have always been looking for ways to reduce their expenditure without necessarily reducing the amount that they buy and consume. If we are honest, many people want to buy more, not less. For some people, this means only shopping in sales, looking out for special offers, or only purchasing products at entry-level prices. However, many people want to buy what they want when they want and are not always looking for the lowest possible price. While this may not be the most prudent approach to making your money go further, it can be a fun way to shop. Increasingly, rather than splashing out in one go, shoppers are looking to spread the cost of payments.
In the past, the most usual way to spread the cost of payments was by using a credit or store card. Everyone knows that this is an expensive option, and many people kid themselves into thinking that they will pay the balance off when the bill comes through. While some consumers do manage to achieve this, many shoppers find themselves with large outstanding balances, increasing interest payments, and minimum monthly payments, hardly paying off any of the capital borrowed.
The times they are a changing
While credit cards are still a popular choice, making up 39% of retail transactions and 56% of the total value of goods and services purchased, there are many other alternatives for customers who are looking to spread the cost. Credit cards remain popular for transactions over $15, according to the Bank of Canada. Debit cards are also popular and there can be no doubt that the trend amongst Canadians is a move away from cash.
Unlike credit cards, the most recent innovations in payment options usually offer the customer scheduled payments so that rather than paying on the ‘never: never’, there is an agreed schedule payment set up. The first significant name in this payment area is Klarna, a popular payment option, particularly among younger consumers. Often referred to as the ‘posterchild of Buy Now Pay Later, it started on a seemingly stratospheric pathway to success and was, at one point, valued at US$40 billion. However, challenging economic circumstances and the increased competition saw it slash its workforce by 10%, and recessions in many of its markets dented its shiny image, resulting in a fall of its market valuation of US$6 billion.
Installments are projected to be the next big thing
Installment options are gaining momentum in Canada as a preferred way to pay among all consumers. According to research from Visa, more than half of Canadians (58%) have expressed an interest in using installments. It is projected that by 2026, this payment method will account for nearly one-quarter of all global e-commerce transactions
However, while some consumers are happy to try out the new names that come to the market, others are more comfortable relying on well-known, well-established brands. This is particularly true when it comes to payment and banking options. Many people feel they are taking enough of a risk simply by transaction online and want a trusted name to fall back on to. This applies to all areas of eCommerce, from making a holiday booking to buying household goods and even gambling online.
Brand awareness and reputation
In fact, when it comes to online casinos and sports gambling, people have even more justification for being cautious and choosing to fund their online accounts through big-name sources. After all, there are stories of dubious offshore operators out there, and people need to know their accounts are secure and that any potential winnings are paid out. This is why many people choose to pay with services like Visa because they only partner with reputable sites and people can be assured of fast payouts. For additional reassurance, people also check out online casinos on review sites, and one like Casion.org ranks the ones with instant withdrawal enabling people to compare what is on offer.
Amazon and Visa now offer an installment option
When it comes to trust, it seems funny to think that a behemoth like Amazon was once an untried and untested e-commerce site that people were wary to shop on. However, one of its early successes was its partnership with established payment partners to help people feel reassured that their goods would be delivered and their payments were safe. Now, in much the same way, they are offering their customers a Buy Now Pay Later option, which has the reassurance of being operated by the largest name in payment processing, Visa. A flexible payment option is offered to Scotiabank and Royal Bank of Canada (RBC) cardholders at Amazon checkouts.
Visa and Amazon have announced a new Buy Now Pay Later collaboration, which will allow customers the convenience of Klarna like installments but with the backing of an enormous name in banking. When making purchases online at Amazon.ca or in the Amazon app, RBC and Scotiabank credit card holders will be able to choose Installments enabled by Visa as their payment method. This gives them the convenience of converting their purchases into fixed payments over a defined period.
A partnership for now and the future
Dan Sanford, Head of Product for North America at Visa, said,
“We are excited to offer our installments solution on Amazon through two of Canada’s leading issuers, granting more consumers access to diversified payment methods and greater financial control with one of the world’s largest online merchants. Recognizing the growing demand for flexible payment options, we are committed to enhancing the end-to-end payment experience for Canadians to address their evolving needs.”
Amazon’s Payment Products Director, Tyler Aldrich, added,
“At Amazon, we are always looking to innovate and improve the shopping and paying experience for our customers. Together with Visa, we’re pleased to offer customers greater choice, enabling customers to pay for their online purchases in ways that are convenient for them.”
Installments enabled by Visa offers merchants, processors, and issuers a payment option that meets their customers’ needs and brings their platforms and sites right up-to-date and reassuringly secured.
