Inflation is beating record after record (5.9% in August 2022 according to consolidated and revised data from INSEE) and should remain high throughout 2023. Faced with rising prices, and despite more of 180 billion euros saved during the pandemic, households have to deal with an increasingly tight budget. The split payment, landed in France for several years, unsurprisingly begins to make its way into consumer habits. It is indeed a solution, provided it is used wisely.
Split payment: pay in installments for a negligible cost
According to the study carried out by YouGov for Django, a subsidiary of La Banque Postale specializing in split payment, 70% of French people have already used split payment. Maybe without even knowing it: the split payment is often presented as a payment in one, two or three times “free of charge”. It is actually a special case of split payment, explains Vanessa Lavergne, Chief Marjketing Officer (CMO) of Django : in the case of payment in installments free of charge, ” the cost is borne by the merchant “.
In other situations, a minority, the user does pay fees, but they are ” negligible “, she underlines. It mentions a cost ranging from 0.75% to 2.15% of the amount invoiced, i.e. between 0.75 and 2.15 euros for a purchase of 100 euros. But in this case, the fees must be clearly communicated at the time of payment.
Whether it’s called “split payment” or “payment in installments (with or without fees)”, it is indeed the same payment solution in question. The two terms correspond, in reality, to a difference of elements of language depending on whether one is addressing professionals or individuals.
It is indeed a credit, but not a consumer credit
Users of the split payment must be aware that it is a credit: “ they are committed to the monthly payments “says Vanessa Lavergne. However, it is not a consumer credit: in addition to “ a different and more fluid process, with a credit check carried out directly at the bank card level », the split payment complies with specific regulations. ” Payment is made in a maximum of four instalments, with a first due date on the day of payment. »
In fact, a split payment can never last longer than 90 days: at most, it includes four installments separated by 30 days from each other, starting on the day of purchase. This is the fundamental difference between split payment and consumer credit: we speak of “consumer credit” when the repayment is made in more than 90 days, whether several months or several years. By its very limited duration, the split payment therefore allows better management of the budget since the sum will be fully reimbursed within three months.
However, who says credit also says commitment and therefore penalty fees in the event of non-reimbursement. The regulations set them at a maximum of 8% of the remaining capital.
A service that has its advantages for merchants
Driven by the increase in online commerce, which has seen a sharp rise since the pandemic and accounted for 14.1% of retail sales in 2021 according to Fevad, split payment has become an essential service for online merchants such as physical stores. And for good reason: it allows an increase in the conversion rate and an increase in the average basket “, emphasizes Vanessa Lavergne. It also gives rise to an effect of premiumization » of the basket: being able to pay in several instalments, customers will tend to move up the range of products.
Especially since the trader does not risk losses: “ we bear the risk says Django. ” The merchant is paid directly when ordering for the full amount. The customer who has opted for split payment, for his part, will reimburse Django, which relies on La Banque Postale Consumer Finance (LBP CF) to offer the loan and advance the sums to the merchant.
Over-indebtedness: an existing risk
Still, like any credit, the split payment presents a risk of over-indebtedness for households, and especially the most fragile. ” We defend a split payment that is triggered occasionally “, explains Vanessa Lavergne. This system must make it possible to spread large purchases, planned or incurred. With the advantage of costing less than a bank overdraft. But it should not be used on a daily basis or taken lightly. ” Split payment should be used sparingly. »
To avoid over-indebtedness, it is necessary to avoid accumulating credits and BNPL (“Buy Now Pay Later”, another name for split payment), and do not hesitate to calculate your remaining life “advises Vanessa Lavergne. A real commitment for Django, which sends customers a summary of deadlines when purchasing.
The start-up also recommends using the application ” High speed budget », free budget management application developed by the CRESUS federation which brings together associations helping over-indebted people in France. “ We are thinking about integrating it, hard, on our site in the future “says Vanessa Lavergne.