The term "payment installment plan" isn't a novel concept within businesses, which have always utilized instruments like RIBA and 30-60-90 day transfers to receive payments from clients. However, the rising expectations in flexibility and security make it essential for new, more agile deferment methods, such as the Buy Now Pay Later.
The concept “payment installment plan” has long been employed by businesses of all kinds to cater to their clients' payment needs. This mechanism allows an amount to be divided into manageable installments. In this way, someone purchasing a product or service can pay in small tranches spread out over time, without necessarily having the full amount on hand immediately.
The key advantage lies in the ability to distribute payments flexibly and conveniently, thus minimizing cash flow imbalances.
On the other hand, sellers offering this payment method meet their clients' needs, increasing the chances of concluding a sale and enhancing customer loyalty.
In today's globalized and digital world, companies seem to cling to traditional methods, at least when it comes to payments, primarily using bank transfers. That said, installment remains a common practice in every business. Let's examine the most utilized methods by businesses to offer deferred payments to their clients.
RIBA
RIBA, an acronym for bank receipt, is a financial instrument whereby the creditor, in our case a selling company, submits a tax receipt to their bank, declaring entitlement to a specific sum from their client. This document obligates the debtor to settle the amount by a specified date and authorizes the bank to collect it.
Invoice Advance
This is a financial tool typically provided by traditional financial institutions. A company with credit towards its clients asks the bank to "advance" a portion of these funds until the invoice due date. Upon the client's settlement, the bank retains the advanced amount, granting the company the retained percentage (typically between 10% and 20%). To this, one must subtract the interests owed to the financial institution. If the client defaults, the bank charges the company the previously advanced amount.
Factoring
Factoring is an instrument similar to invoice advance but more structured, based on an ongoing relationship. In factoring, there's a specialized operator, termed Factor, who acquires some commercial credits in advance, following a careful assessment of the reliability of debtor clients. The credit assignment can occur in two distinct manners:
30-60-90 Day Transfers
This method allows for a debtor's payment to occur 30, 60, or 90 days after the invoice issuance date. It's a deferred payment in a single installment and can be executed directly via transfer.
Traditional installment methods have multiple limitations, primarily their lack of immediacy and automation. Today, new solutions aim to streamline and expedite those procedures that divert time from other strategic business activities.
Increasingly popular is the Buy Now Pay Later (BNPL), a short-term financing type allowing consumers to purchase a good, online or offline, paying an initial installment at order placement and subsequent ones typically 30 days apart. Predominantly found in the consumer market, it's now also available for business clients.
Addressing the needs of this target audience is precisely the goal of Opyn Pay Later, the innovative "buy now pay later" service specifically geared towards the Business-to-business world.
Opyn provides a flexible and modular payment installment solution suitable for any company type. This means that using the platform, B2B suppliers can choose, for every individual transaction, both online and in-store, various payment options to offer to their clients in a tailored manner.
The advantages of Opyn Pay Later compared to traditional methods are countless, here are a few:
Ready to ditch old installment methods and start selling more through Buy Now Pay Later? Request Opyn Pay Later now.