How does payment in installments work and what are its pros and cons?

Many online platforms now offer split payments, that is, paying for goods in parts. It is not always clear to users what this is - a modern offer to take out a loan or some other mechanism? Let's figure out how it works and whether it's worth using this tool.

What is split payment and how does it work

Split payment, or payment in installments, is a system when the purchase price is divided into several equal shares. The buyer transfers the first one immediately, the rest are paid later according to the schedule. This is convenient with expensive purchases. For example, paying 20 thousand at a time for a new sofa can make a hole in your monthly budget. If you deposit 5 thousand per salaries and advances, this will help save funds for essential needs.

At the same time, the split payment service is provided not by the store itself, but by a third-party BNPL service. The abbreviation contains the very meaning - buy now pay later, that is, “buy now, pay later.” Therefore, you can only split in a store that cooperates with a similar service. Sometimes a company interacts with several services, so when purchasing you can choose which one you like best.

In this case, almost no additional effort is usually required from the buyer. When placing an order, you must indicate payment in shares, parts or splits and enter the following data:

• FULL NAME;
• phone number;
• E-mail address;
• data cards, from which the first payment will be debited immediately, and subsequent payments will be debited according to the schedule.

You can pay in installments for several goods at once until the limit that the service has set for the client is exhausted. Terms depend on the service itself. We'll talk about this below.

Do I need to pay a commission when paying in installments?

The default is no. In the end, you only pay the cost of the goods. The service benefits from the stores, since they can count on additional sales thanks to such installment plans.

What services for payment in shares exist?

Here are the most notable ones.

"Yandex Split"

Yandex has two options: a free split for two months, or rather six weeks, and with a commission for a longer period. The first implies that the cost of the goods is divided into four payments: the first will be withdrawn immediately, the rest - every two weeks until the debt is repaid. The split can also be extended over four or six months, but for an additional fee. For example, if you split-pay for an item for 1,050 rubles within 4 months, you will have to pay a commission of 149 rubles.

Find out more → 

"Shares" from Tinkoff

The service divides the cost of the product into four parts. The first one is written off immediately, the rest - every two weeks. All without commissions. The limit is set individually, but most often for purchases in one store it is 30 thousand rubles.

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"Pay in installments" from Sber

The payment scheme is the same as everyone else’s: the amount is divided into four parts, the first will be written off immediately, the rest every two weeks.

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“Share” from Alfa-Bank

Four payments are required over six weeks. The limit is set by the partner store, usually it is 30 thousand.

Find out more → 

“In parts” from Sovcombank

Standard scheme: four payments over six weeks. The limit can be found on the website.

Find out more → 

Is it possible to repay the debt early?

Yes, everyone provides this opportunity. You can transfer the balance on the website of the service through which you paid in installments.

Is it possible to return goods paid for in installments?

Yes, under the same conditions as usual. The service will then simply transfer the money already paid to the one you specified when purchasing map.

What happens if there is no money on the card on the day of payment?

In "Shares" there is a fine for late payment - up to 7% of the balance of the debt. They also talk about sanctions in “Share”, but do not name the size. The rest only indicate that they will repeat withdrawal attempts. No other consequences are reported, but as time passes, the company may go to court and collect the debt through the bailiffs.

Who can use payment in installments

The condition of all services is that the client must be an adult. It is also important that the card is registered to the one who pays.

Is payment in installments a loan?

A logical question, because the mechanism is very similar. But split is not a loan, and information about it is in credit history don't hit.

However, you should be more careful. For example, Yandex has an improved split that offers to stretch payments over one or two years. But this is already a credit product, although it is presented on the same landing page.

Can the tool be used in an offline store?

Some services, in particular “Shares”, “Share” and “Parts”, provide this opportunity. On their websites you can find lists of stores where the tool is available. You will need to pay by card using QR code, and the split system is activated.

What are the pros and cons of paying in installments?

The advantages are clear:

• You don't have to save up for any purchase. You can buy something now and pay later - without commission.
• Such an installment plan does not affect your credit history, which means there will be no problems with loans.

The disadvantages are less obvious:

• Sometimes paying in parts does not allow you to receive bonuses or cashback. It depends on what code the purchase is made through the service and whether it generally qualifies as payment for goods or as a transfer. If cashback is important to you, it is better to clarify this point with the technical support of the service you have chosen.
• It is not always possible to pay in installments, even if the online store provides such an opportunity. Services, based on some algorithms they know, evaluate whether they are ready to provide funds to the client. And they often refuse already at the purchase stage. This is unpleasant and can affect plans.

What you need to remember when paying for goods in installments

Beware of scammers

There are more and more BNPL services, so it is inevitable that sites that simply want to rob gullible buyers. Therefore, it is better to be careful. However, if you follow the path when you find a product on a store’s website and use the service with which it cooperates, it is quite safe. But to do the opposite, that is, look for a BNPL service and buy goods in installments from its website, you should be more careful. If we are not talking about understandable players.

Read the terms and conditions

Usually the store itself publishes the basic conditions on its website. But it’s better to go to the service page and read what they offer so that there are no surprises. Find out what the fines are for late payments, for example.

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