<New options, separately licensed>
We have supported a new open-loop consumer finance scheme where instalment purchases are offered by merchants, and financed by either merchants or acquirers. This scheme is used in the countries (for example, in Greece) where there is an agreement between acquirers and issuers that for certain BINs a merchant can offer instalments under specific conditions.
The scheme is beneficial for cardholders as instalments are interest-free. Merchants can increase sales volumes for high-ticket items. As a result, acquirers receive more revenue from merchant service fees as well as from factoring fees.
How does the merchant instalment transaction work?
During the purchase, a cardholder selects instalment conditions on a POS terminal. Way4 Acquiring checks if the selected parameters such as number of instalment months and grace periods are applicable for cards of this issuer. After that, the system sends an instalment transaction request to the issuer. If approval is received, Way4 completes the purchase, stores the created instalment plan and calculates the maturity date for each instalment. Every month according to the plan, Way4 will send respective presentments to the issuer in the standard clearing file.
Acquirers can reimburse their merchants in one of the following ways:
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Monthly. This can be done in instalments according to the presentments sent to the issuer.
Monthly instalment reimbursement to the merchant
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Immediately for the full amount. This option opens up a new revenue stream for acquirers, as they can set up and charge a factoring fee for it.
Immediate reimbursement to the merchant, minus the factoring fee
Within this merchant instalments scheme, Way4 Acquiring provides the following functionality:
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Stores instalment plans for partner BINs
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Handles the transaction processing for instalment purchases between the acquirer host and domestic payment schemes, including pre-authorization for the full amount and presentments for the instalment amounts
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Enables two ways of settlement with the merchant
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Enables setup of factoring fees.