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Increasing Popularity of BNPL Payment Methods
Having your products right at home, without having to pay for them immediately - that's the essence of installment payments. Whether it's an unexpected expense or a planned purchase of higher value, BNPL offers consumers the convenience and flexibility they need.
No wonder, then, that 58% of Dutch consumers say they would be willing to pay in installments if offered that option (source: Market Effect, 2020). In fact, one in seven say they prefer to pay in installments, even when they have sufficient financial resources.
Two in five Dutch consumers say they have already used spread payment for an online purchase.
The Downside of BNPL: What to Watch Out For?
While BNPL payment methods offer convenience, there are also pitfalls. Many traditional BPNL providers charge interest or fees for late payments, which can lead to debt and overcrediting. In addition, communication about terms and conditions is not always transparent. For retailers, this can be detrimental to brand trust.
Fortunately, consumers are increasingly aware of this and oversight of BNPL providers is also being tightened. The need for alternatives that commit to responsible payment behavior is growing, as is the importance of fair payment options that fit the financial situation of the individual consumer.
Regulations surrounding BNPL are also evolving. Stricter national and European rules are being worked on to protect consumers. Consider PSD2 and future European legislation on consumer credit. This underlines the need for more responsible forms of spread payments.
So What Is Responsible Installment Payment?
A responsible BNPL solution combines flexibility with clear terms, no interest, and a system that prevents overcrediting. For example, this means:
No hidden costs or fines
No Credit Bureau Registration
Transparent communication about payment terms
Guidance on payment behavior, such as reminders
iDEAL in3 - Example For a Socially Responsible BNPL Solution
Against this background, the Dutch payment method iDEAL in3 is interesting. This BNPL option allows payment in three equal installments within a 60-day period - without interest or additional fees. Payment is made via iDEAL, which feels familiar to consumers.
What sets iDEAL in3 apart is its focus on responsible payment behavior. There is a credit check beforehand and a personal spending limit. This prevents consumers from spending more than they can bear. When the order is placed, a third of the purchase amount is immediately charged. This encourages awareness, underlines the payment obligation and indicates that the consumer has (part of) the amount available. Moreover, iDEAL in3 charges no late payment penalties and earns nothing from debt, further reducing the risk of debt accumulation.
For Retailers: What Does It Offer?
Besides protection for the consumer, iDEAL in3 also offers advantages for merchants. Since customers can spread their purchase payments without extra costs, the barrier to buy is lowered. This can translate into:
Higher conversion: 15–25% fewer dropouts during the payment process
Higher order value: 25–35% increase due to a lower psychological barrier
Fewer returns: up to 4 times less, thanks to more conscious buying behavior
Certainty: 100% payout within 15 days, without credit risk
Spread Payment as Part of Your Payment Options
Responsible BNPL solutions integrate well with a wider range of payment methods. Offering spread payments alongside trusted payment methods creates a flexible and secure checkout experience - for both consumer and retailer.
