Splitit makes it easier to handle big bills. Credit cards, lines of credit, and personal loans can help you pay for big purchases with less cash up front, but they come with interest and other fees. Consumers can now use a variety of “buy now, pay later” (BNPL) services, such as Splitit, that let them pay for things in stages without interest or other secret costs. This makes it much easier for people to buy things on credit.
Also, businesses that sell expensive things may have trouble finding buyers who can pay for them all at once. Using a BNPL service makes the market bigger, so more people can buy expensive goods and services. It was thought that the buy now, pay later business would be worth more than $125 billion around the world. With so many BNPL services to choose from, it’s more important than ever for businesses to work with options that offer the right benefits.
In this guide, we look at Splitit, which is one of the best ways to pay in installments in the US. We explain how Splitit works, what features it has, who can use it, and what other options are out there that could save you money. Let’s see if Splitit is the best choice for your business.
How is Splitit used?
Splitit is a service that lets customers pay for their items in installments. The company started making its services in 2012 and has since raised more than $260 million and gone public. Alon Feit and Gil Don are two of its leaders.
Splitit is different from many other BNPL services in that users can use their credit cards to confirm funds for payment plans. This lets customers avoid having their credit checked and going through other annoying application steps.
How do I use Splitit?
Many BNPL services use credit checks to figure out how creditworthy a customer is, but Splitit does things in a completely different way. Instead, Splitit looks at how much credit a customer has on their credit card to see if they can afford a payment plan.
Next, Splitit puts a hold on the customer’s credit card for the amount of the buy. The permission hold is lessened by the amount paid each month by the customer. Once the full amount is paid, the permission hold is taken off completely.
Even though the hold will decrease the amount of available credit on the credit card, the customer won’t have to pay interest on the hold because it isn’t a completed buy. Also, since the customer doesn’t pay Splitit any interest or fees, the whole payment plan is free.
All of this is done through a checkout site that is easy to use and that businesses can add to their online shopping carts. The Splitit payment feature is easy for both businesses and customers to use, as the customer only needs to enter their credit card information to start the buying process.
So, if Splitit doesn’t charge fees or interest, how does it make money? Merchants have to pay a fee to use this BNPL service. Costs change based on whether the merchant wants to be paid in full upfront or in installments, with installments being cheaper for the merchant. Let’s look at some general Splitit seller prices below:
Full Payment Upfront:
Starting at 2.5% of the total purchase price (often a higher number for new businesses; call Splitit for a rate).
Payment in installments (customer pays same installments): $1.50 plus 1.5% of the total purchase price
When I use Splitit, is there a minimum or highest amount I can buy?
Splitit does not mention a minimum or maximum buy size. But a lot of stores will tell buyers what their minimum purchase size is. Customers won’t be able to use Splitit for small ticket things if you tell them not to.
Is it safe to use?
Splitit is a safe choice for your customers because the company does not sell your customers’ information or try to sell them other goods. Splitit’s business connection is with its merchant partners. The seller pays usage fees and supports the Splitit interface.
Can Anyone Use Splitit?
Splitit can be used by businesses all over the world to set up payment plans for their users. Splitit works with Mastercard, Visa, Discover, and Union Pay. This means that people who use credit cards from these companies can use this service, no matter where they live.
Splitit works well with a number of the most popular eCommerce sites. Look at the eCommerce sites that work with the Splitit app below:
- Salesforce Commerce Cloud
Also, if your eCommerce service isn’t on the list above, don’t worry! Splitit has special interfaces that help all kinds of online businesses use BNPL services.
Key Features of Splitit
A service that lets you pay in installments is only as good as the features it gives its users. You should make sure that Splitit works well with the way you run your business, but it’s also important to look at the site from your customers’ points of view. Let’s look at the most important parts of Splitit:
When using Splitit, a dollar sign shows that there are no fees or interest.
No interest or fees
First of all, Splitit doesn’t charge customers any fees or interest, which makes it a cheap way to buy things in installments. Splitit is different from credit cards, lines of credit, and other financial choices like PayPal Credit in that it makes it easy to get fee-free payment plans. This is a benefit that your customers will like.
Easy ways to pay
Customers can easily pay their payment plans with Splitit. When you buy something, you pay the first monthly payment. Next, buyers can choose between three and 36 payments, giving them full control over how much they want to pay each month.
After the sale is done and the first payment is made, Splitit will automatically charge the customer’s credit card every month for the amount.
Pros and Cons of Splitit
Let’s talk about what’s good and bad about using Splitit:
As you can see, there are a lot of good things about Splitit. Let’s look at some of the good things about this service:
- No Interest Payments: Unlike credit cards and other types of borrowing, Splitit doesn’t charge customers interest payments. Customers can pay in as many as 36 stages, and they won’t have to pay any interest!
- No Hidden Fees If a buyer works with Splitit, they won’t have to pay any interest and there won’t be any hidden fees. Splitit doesn’t even charge fees for being late!
- Splitit is very easy for your users to set up and use. You don’t have to sign up for an account or fill out long forms. With Splitit, it only takes a few minutes to complete a deal.
- Option to Make More Payments Customers can make more payments if they want to have more control over how much they pay. If a customer wants to pay early, they don’t have to wait until the whole payment plan is done.
- Fees that are easy to understand for sellers: Splitit makes money by charging sellers a fee for its BNPL features. Merchants can choose to get the full amount of the buy up front or in the same number of payments as the customer. Most of the time, it’s cheaper for sellers to get paid in stages.
- Global Presence: Splitit works with Visa, Mastercard, Discover, and Union Pay, so anyone in the world who uses one of these cards can use its payment plans. This BNPL service is truly international.
- No Credit Checks: Last but not least, Splitit does not check your customers’ credit records. This means that if they use this payment choice, it won’t hurt their credit score. Instead, Splitit checks to see if your customer has enough money on their credit card to pay for your services.
- A cross shows the bad things about using Splitit.
Splitit has a lot of good things about it, but there are also some bad things to think about:
- Splitit is used by a lot of businesses around the world, but it doesn’t have as many retail partners as some other BNPL companies. This isn’t a deal-breaker, but it could make people less familiar with the Splitit name.
- When a customer uses Splitit, a permission hold is put on their credit card account. This means that the customer will have less open cash. Some customers might find this annoying and would rather use a standard loan that doesn’t affect their credit card.
- No Benefits for Improving Credit When people decide to use credit, it can also help them improve their credit. A person’s credit file will look better if they pay their credit card bills and other loans on time. But since Splitit doesn’t tell credit companies about successful payments, this BNPL service won’t help users raise their credit scores.
- Fewer ways to pay: Splitit works with Mastercard, Visa, Discover, and Union Pay, but American Express is noticeably absent. Your users can’t use American Express with this tool (yet), which is a shame.
- Customers Need a Current Credit Card Unlike other BNPL services, which can give loans or credit without using customers’ existing credit lines, Splitit users must have a current credit card. This site doesn’t work with bank cards and doesn’t give out standard loans.
- Those who don’t have a credit card won’t be able to do this.