Visa and BMO Team to Expand Credit Card Installment Access

Visa teamed with BMO to offer BMO credit card holders access to Visa’s Installments program.

The payment option, set to launch next year, lets consumers at the Canadian financial institution convert qualifying purchases into smaller, equal payments made over a set period, the companies said in a news release Monday (Oct. 30).

“As the need for flexible payment options continues to grow globally, we’re committed to advancing a banking and payment experience for Canadians and merchants to meet their evolving needs,” said Visa Canada Vice President and Head of Product Dan Iwachiw in the release.

The launch expands on BMO PaySmart, the company’s post-purchase credit card-based installment plan solution, per the release.

PYMNTS discussed the popularity of credit card installments in a conversation with Splitit CEO Nandan Sheth this month.

Sheth said the ubiquity of debit and credit cards offers a natural flow toward embracing installment plans for everyday purchases and big-ticket items.

“Installments are here to stay,” said Sheth, who added that no matter whether the installments have a 0% APR and low fees, or if they carry interest rates, “attaching installments to your credit or debit card has become a very real category.”

There’s enough concern on the horizon with holiday spending, he said, and uneasiness over delinquency rates and performance of the more typical buy now, pay later (BNPL) loans may make merchants hesitant about offering BNPL to their end consumers.

“The merchants that are thoughtful understand that approval rates have been sinking, and they’re going to sink even further,” he said.

The conversation followed the release of the report “Installment Plans Becoming a Key Part of Shoppers’ Toolkit,” a PYMNTS Intelligence and Splitit collaboration.

The data from that report showed that 60% of consumers have used installment plans in the past year — with 45% using credit card installment plans, rates which are higher than seen with buy now, pay later (BNPL) and merchant-driven installment programs.

And while there will always be a market for consumers with less-than-stellar FICO scores to embrace BNPL, card-wielding consumers, Sheth said, “like their rewards, they like the safety and the protections that the credit cards provide.” These shoppers make up 75% of the U.S. population and have around 90% of the purchasing power fueling the economy.