Consumer sentiment and behaviour is always evolving, their needs and desires seemingly changing as frequently as the seasons. In fact, an inevitably shifting consumer mindset is one of the only constants within the retail industry. With this understanding, merchants everywhere are perpetually exploring ways by which they can keep up with the consumer, or get out ahead of them, in order to ensure that they provide the offering and service they seek. And, increasingly it seems, as part of that offering and service, consumers are looking for greater flexibility at checkout, including purchasing options like ‘buy now, pay later’. It’s evolving sentiment that represents a bit of a transformation of purchases. And it’s one, according to Brian Weiner, VP and Head of Product and Digital at Visa Canada, that represents the uninterrupted progression of the payments industry.
“At the end of the day, consumers want flexibility and they want choice,” Weiner asserts. “And merchants now have the technology available to them in order to provide that flexibility and choice in ways that they just couldn’t previously. We’ve seen a number of consumer trends emerge of late, including the rise of contactless payments, open payments in transit, crypto payments and, most recently, in the increased demand for installment options. The payments ecosystem is constantly evolving. Consumers and merchants are transacting in different ways and places than they have traditionally. Merchants want to sell things. And consumers want to be able to purchase things. So, it’s our job as a network to be where consumers and merchants are engaging, enabling those transactions through the solutions that we offer.”
One of the solutions that Weiner refers to is the recently announced Visa Installments. Set to launch in Spring 2022, Installments is a collaboration between the global financial services giant and Moneris – a recognized world leader in unified payments – that allows participating merchants to provide installment options at checkout to eligible Canadian credit cardholders on qualifying purchases. At the time of purchase, the option provides consumers with the flexibility to choose whether to pay for their purchase in full or in smaller, equal payments that are made over a defined period of time. And because Installments payments are drawn from the cardholder’s existing credit balance, they don’t take on any additional debt, making the solution an especially responsible one as well. It’s an offering from Visa that not only facilitates these kinds of transactions, Weiner points out, it does so in a seamless and frictionless way for both consumers and merchants alike.
“The idea of paying for purchases through installments is not a new concept,” he recognizes. “However, the technology that we’ve put in place to enable these types of purchases is fairly new and represents a completely different way of delivering installments to the market. It’s going to allow merchants to meet a growing level of interest, particularly among affluent, digitally-native consumers, in having access to more options with respect to the ways they make payments and manage their cash flow. Through our solution, we’ve effectively embraced the concept of installments within an existing Visa transaction. With one of the other fintech solutions, when making a purchase either in-store or online, customers are often taken away from the retailers’ website to another page where they have to fill out a form and authorize a credit check. It results in a tremendous amount of friction within the experience. Because Installments has been built within the existing flow of a regular Visa transaction, with cardholders presented with payment options at the point-of-sale, there is never a deviation away from the retailer, creating a seamless purchasing experience.”
Meeting consumer demand
Installments represents an innovation in payments that, as Weiner points out, reflects the continued evolution of the industry. However, it’s also representative of a strong response by the financial services leader to mounting demand for ‘buy now, pay later’ purchase options. In fact, according to findings of a recent Visa survey, installments adoption among Canadian consumers has increased 30 percent over the course of the past 12 months. In addition, more than a third (35%) of Canadians said they would not have made recent purchases if ‘buy now, pay later’ options were not available, with a further 47 percent recognizing the importance of flexible payment options since the onset of the pandemic. As a result of this rising sentiment, installments currently represent over $1.7 trillion of global payment volume, with approximately $50 billion occurring in Canada annually. Visa Installments certainly goes a long way toward satisfying this consumer demand. However, Weiner suggests that the flexibility provided to the merchant with respect to the management of the payment options they provide is just as critical a component inherent in the solution.
“Supported by our technology, we provide the capability for merchants to load information into the system with all of the offers available to their customers,” he explains. “It enables them with incredible flexibility to be able to make different offers presented to different customers, depending on a number of different factors. Visa’s job in this equation is to facilitate the connection between the merchant and customer, enabling them to do business with each other. And, because Installments is an API-based solution, it’s incredibly easy for merchants to plug into their existing systems. Moneris is the biggest acquirer in the country and integrated to the solution. Because of this, it’s been made very simple for any of Moneris’ merchant customers to take advantage of this offering.”
Weiner also notes that solutions like Visa Installments often result in 20 to 25 percent increases in basket size and equally impressive improvements in conversion rates which, for retailers operating in any category, are each representative of significant growth. In Weiner’s estimation, Installments presents this opportunity to merchants and a platform to enhance the customer’s shopping experience and journey, instilling in them a trust that is often critical in defining their relationships with brands. And, he adds, it’s a solution that allows Visa to continue evolving with the expanding and changing payments ecosystem, positioning it well to carry on providing the all-important connection between merchant and customer.
“It’s never been more important for businesses and organizations to continue exploring new ideas and searching for ways to improve and enhance their current offering and service. Visa has always shown a commitment to doing this, and we continue to innovate and push the envelope. We’re one of the most digitized economies in the world here in Canada, one of the most advanced electronic payments markets in the world. So, the bar is already high with respect to offering, and it just keeps getting pushed higher. As a result, there’s no question that merchant demands and expectations are changing. And it’s also without question that consumer demands and expectations are changing, too. Each want options, to be able to transact in new ways and new places. And Visa wants to be there to enable them to do that, wherever they are, in whatever form factor they’re using and channel they want to operate in. In whatever way they want to interact, we just want to enable that digital commerce to take place.”
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