Is this the most customer-friendly "Buy Now, Pay Later" option?
We’ve all seen the logos at checkout: Klarna, Affirm, Afterpay. The "Buy Now, Pay Later" (BNPL) model has become a standard feature in e-commerce, and for good reason—it helps boost sales by making higher-priced items more accessible.
But most of these services require customers to sign up for a new loan, which often involves a credit check.
There's another player in this space, Splitit, that works on a fundamentally different principle. Instead of creating a new loan, it lets customers use their existing credit card to pay in installments.
How Splitit Works (and Why It's Different)
The concept is simple but clever. When a customer chooses Splitit, the service places an authorization hold for the full purchase amount on their credit card. This isn't a charge; it's a hold that temporarily reserves the funds, much like a hotel does when you check in.
Then, the customer is only charged for the first installment. Each month, a new charge for the next installment is processed, and the hold on their remaining balance is renewed and reduced. Because the full amount is secured from the start, you, the merchant, receive the full payment upfront. Splitit handles the monthly collections.
This model has some powerful benefits for customers:
No New Debt or Credit Checks: Since they are using their available credit line, there are no applications, no new loans, and no impact on their credit score.
Zero Interest: Customers pay no extra interest or fees beyond what their credit card issuer might charge.
Keep Your Rewards: They can still earn their usual credit card points, miles, or cashback on the purchase.
The Big Advantage for Online Businesses
For anyone selling digital products, courses, or high-end goods, this is a game-changer. You get the sales-boosting power of installment payments without the friction of a loan application. It can significantly reduce cart abandonment and increase the average order value, as customers feel more comfortable committing to a larger purchase when it's broken down.
The best part is that it’s becoming more accessible. Splitit integrates with all the major e-commerce platforms you'd expect, like Shopify and WooCommerce. It’s also being built into creator-focused platforms like Whop, allowing for seamless integration right at checkout.
Is There a Catch?
The main requirement for the customer is having enough available credit on their card to cover the entire purchase amount. If a customer wants to buy a $600 course, they need at least $600 in available credit for the authorization hold. This makes it a great fit for responsible spenders but might not work for every customer.
Overall, Splitit offers a unique and compelling twist on the BNPL model. It's a powerful tool for merchants that respects the customer's existing financial relationships, making it one of the most transparent and straightforward installment options available today.
Find out more: https://whop.com/blog/splitit-review/