Square Will Allow Businesses to Accept Installment Payments
Today, Square introduced a program allowing small businesses to accept installment payments from their customers. With Square Installments, customers can split large purchases into fixed monthly payments, but the business still receives the full purchase price upfront.
A recent study from Klarna showed 82% of online merchants believed that offering instant financing would increase their sales. A separate study from Square revealed that 68% of Americans would be more likely to shop with a small business that had financing options. Square Installments could significantly increase the sales revenue for a business when used correctly.
Customers interested in an installment plan can apply in the store through a few simple steps. If they are approved, Square then becomes a lender for their purchase. Square will explain the terms of the installment agreement, including the interest rate and the length of the loan.
Installments are available for purchases of $250 to $10,000, with 3, 6, and 12-month terms. Interest rates range from 0% to 24%, and typically increase for longer term installments. There is no deferred interest or early payment penalties.
The business is not held liable if a customer misses a payment. “If they miss a payment, the credit risk is on Square Capital, not on you.” Square Installments can be incorporated into any Square platform in approximately 10 minutes.
Currently, Square Installments is available in 22 states.