It its latest move into the banking industry's turf, Square is now letting its sellers offer payment installment plans. The company says it's easy for a seller to sign up for the feature and customers will be given the option of paying their total over the course of three, six or 12 months. While customers will have to apply for a payment plan, Square will assess and decide on those applications in real time.
"We're focused on removing the complexity associated with financial products, enabling more businesses to access incredible tools that can help them grow," Jacqueline Reses, head of Square Capital, said in a statement. "Square Installments delivers simple and quick financing to customers seeking greater flexibility as they make purchasing decisions."
When the company surveyed sellers, around half said the main reason they didn't offer a payment plan was because those backed by banks and other parties had complicated setup processes. Many also have sales requirements that are prohibitive to small businesses.
With Square's option, businesses won't have to carry the burden. The company will pay the retailer what the customer owes them up front, and the customer will make their payments to Square. Interest rates, based partially on a customer's credit, will range from zero to 24 percent APR, and applying for the plan won't hurt your credit score, according to CNBC. The service is available in 22 US states for purchases totalling $250 to $10,000.