35% of shoppers more likely to buy online with interest-free monthly installments
35% of consumers will be more likely to make a purchase online if offered the ability to pay in interest-free monthly installment payments, according to a survey by Splitit. Even more notable, 47% of online shoppers surveyed claimed that a payment solution offering zero interest is the most important consideration when choosing an installment plan.
According to the research, 83% of online shoppers claim that the fear of overspending or losing control of their cash flow would deter them from making an expensive online purchase. Among millennials specifically, 25% were most concerned with the possibility of damaging credit scores when shopping online.
They also say that installment payments can mitigate these uncertainties and lead to higher AOV for retailers. Nearly 25% of online shoppers even stated that the option of interest-free monthly installment payments would encourage them to increase the size of their purchase. This is compared to a mere 4% of shoppers who would be encouraged by consumer financing options to increase their cart size.
An interest-free, monthly installment plan offers consumers the best option in alleviating their financial woes and allowing them to shop without burdensome restraints. Offering an effective payment solution is a win-win for both consumers, who can afford more expensive purchases, and for merchants, who can increase revenue and decrease cart abandonment rates.
– Gil Don, CEO and Co-Founder, Splitit
The survey also revealed which installment plan features are most likely to keep customers satisfied and on board. Nearly half (47%) of consumers surveyed said that zero percent interest is the most important consideration when deciding on a payment solution. No late fees polled as the second most important factor, with 17% of consumers saying that such fees would deter them from selecting a payment option. 20% of millennials specifically stated that no late fees are the most important consideration when signing up for a payment solution.
The survey, conducted in July 2018 is based on a representative sample of more than 1,000 respondents from the United States, aged 18-65+.