Created: 15.07.2021. Last update: 04.10.2022. Contains 1 A/B testing result.
#10: Do you clearly show that shoppers can pay by installments, and how much will it be per month? (if you have such payment option)
In recent years, it has become trendy to offer payments by installments, making it easier for shoppers to buy products without big one-time spending. It's especially very relevant for stores that are selling high-priced items. But, in my experience, this one is also relevant for stores with an average order value below $100
The structure of the shopping cart can be decomposed into different elements, each of which influences the purchase decision.

The subtotal price is one of the most important factors at this point, especially in cases where your store sells expensive products or users buy several products at once, as a result of which the subtotal price becomes quite tangible for shoppers' wallets.

At this point, buyers begin to evaluate whether it is worth buying this product (s), whether this is the right decision, and whether they can spend that much money on it right now. These are standard questions and almost all of us have them when we shop online. And that's okay.

Fortunately, installment payments have become very popular in recent years because they help people make purchases here and now without serious expenses, significantly simplifying the process of rationalizing the purchase and making a purchase decision.

Therefore, now you need to use this option in your store. Because more and more buyers use this payment method. And they use it only because it is convenient for them.

But having such a payment option is only part of the story. It is equally important to properly promote these payment methods and show your shoppers that such an opportunity is available.

So here is the list of recommendations for the promotion of this feature on the cart page/window:
  • Use the most popular installment solution(s) in your region. For example, Afterpay is one of the most popular options in the US and the leading option in Australia. At the same time, Dividebuy is very popular in the UK (in general, aim to use the most popular services because users will know about them, and this is very important. As soon as they see a familiar logo or name, they immediately know they can pay in installments)
  • Place this section near the subtotal price because this is the most appropriate place, and the user will be able to compare a high price (subtotal) with the smaller one (installment payment per week/month). This contrast will affect their purchasing behavior.
  • Do not just write about the possibility of paying in installments, but also divide the subtotal price into separate payments so that the user clearly understands that he will only need to pay 1/4 now, and this is not such a significant amount. Usually, installment providers will give you the code for that or you will need to add with a developer)
  • Use company logos (provides of installments) to make it easier for the user to notice the presence of such a payment option because visual elements are much easier to read than text ones.
  • If you offer installments only in certain countries, but you have shoppers from all around the world, make sure to use geo-targeting to show the installments section only for those who can use it. Otherwise, it will create a lot of confusion and friction.
  • If your installments provider allows adding dynamic checkout buttons right on the cart page to streamline the checkout process, consider adding this option to the cart. If many customers use this at the checkout, it makes sense to place such a button in the shopping cart to speed up and simplify the shopping process.
  • If users can pay with installments only after a certain threshold (like $35 in Afterpay) and the subtotal price is lower, you can either hide/show this section from the shopping cart (based on the subtotal price amount) or you can show that installments payments are available only for orders higher than the threshold. Make sure you don't confuse your shoppers by showing them that they can use it when it is prohibited to choose this payment option at the payment step.

Here's the list of popular payment by installments options:
  • AfterPay;
  • Klarna;
  • QuadPay;
  • DivideBuy;
  • Affirm
  • Shop Pay Installments
  • Paypal Installments

I worked with different companies and have seen how the adoption of installment payments is growing yearly. One of the stores had $600 AOV, and 25% of the customers paid in installments, while another had $70 AOV, and 18-20% of customers used that option.

As you can see, this feature (and good promotion of it) is essential not only for stores with costly goods but for almost all businesses nowadays.

Now let's look at some good and bad examples from popular e-commerce stores, so you will clearly understand how to implement this guideline.

A bad example from Tinyrituals

They have Afterpay on the Checkout but promote it neither on product pages nor on the shopping cart. They have not too cheap prices, so for their shoppers, especially for those who buy 2+ products (who are the most valuable customers for the company), it could be a very good incentive to make purchases. Therefore, they still have something to work on in order to increase the conversion rate.

A bad example from Gymshark

They also have Afterpay on the Checkout (and even have an Afterpay icon on the image on Mobile devices) but don't promote it on the shopping cart. So they could improve shopping cart design by adding installment price below the Total (i.e. $24 USD every 2 weeks via Afterpay. Interest-free). It could increase both conversion rate (for those who can't afford to pay $96 right away) and AOV (for those who will buy more items per order due to installment option)

A bad example from Aloyoga:

They have the section with installment price, but it's placed below the "Need help?" section, far from the Checkout button. Users need to scroll to the bottom of the cart to see it. That's an awful implementation of this element. As a result, most users will never see it. There is more to work on for Aloyoga designers and marketers.

A good example from Casper

They are selling costly products and must have and promote installment payments very well. And they do! You can see the line below the Checkout button that shows the price divided by 24 months and "0% APR" which is another essential thing. Also, they have Learn More button, so users could read all the details about how it works.

A good example from Leesa shopping cart.

Right under the Checkout button, you can see a line of text with a logo about installments payment. It shows the price per month and contains the well-known logo of Affirm. Well done!

A good example from Puravida

My subtotal is around $68 and right below the subtotal price, they show me an installment option of just $17/month. It also contains the logo of Afterpay, making it easier for the user to notice and realize the presence of such an option. Another important thing is that they likely use Afterpay as it's the most popular solution in the US, which is another essential factor. Good job!

A/B testing results
We conducted a few A/B tests, where we added promotion of installments payments below the subtotal price on the shopping cart.

Results of the A/B test
  • Revenue Per User (RPU) increased by 4.77% from $18.67 to $19.56
  • Ecommerce Conversion Rate (ECR) increased by 0.42% from 26.37% to 26.48%
  • Average Order Value (AOV) increased by 4.35% from $70.79 to $73.87

As you can see here, the biggest impact of this feature was on the AOV which eventually impacted RPU. And it's pretty reasonable because when users know that they can pay in installments, they are willing to buy more or to complete the purchases with a higher subtotal price, as a result, it impacts AOV.

*Ecommerce Conversion Rate by Users and Revenue per User were calculated based on Custom reports in Google Analytics, so the numbers from the screenshot are not the most accurate. The screenshot is shown so you can see the graphs.
Made on