Installment-Payment APIs Now Part of Visa’s Business

Jul 25, 2019

In a move to better align itself with its fiercest competitor, Visa Inc. has announced that it will get into the installment-payment APIs market.

The announcement came shortly after Mastercard Inc. told the world it bought Austin, Texas-based point-of-sale credit financial technology company, Vyze Inc. and as the product gets more popular due to options offered from non-banks, like Affirm Inc. and PayPal Holdings Inc.

Background on Visa’s Move

Starting in January, Visa’s new offering, which includes application programming interfaces that will link to Visa issuers and allow merchants to offer Visa cardholders to pay for purchases in installments at the register, will be available. Point-of-sale credit will be available in stores, online, and overseas, whenever shoppers plan to pay with their Visa cards.

Visa moved ahead with this venture because more and more consumers are interested in paying for purchases over time. The beauty of installment payment APIs over credit cards is that purchases must be paid in full by a certain date.

Part of Visa Next

Visa’s installment payment APIs are some of the first offerings available through the credit card network’s software storehouse called Visa Next. Since those who have access to the APIs already have Visa credit cards, the consumers don’t have to go through credit checks, download apps, or open additional lines of credit.

Visa plans to pilot the new service with a number of providers around the globe, including, the network’s CyberSource unit. This unit will support the installment-payment capability for both merchant and acquirer clients.

Why Visa Is Taking the Plunge

The installment payments API market is becoming increasing crowded, which is why Visa decided to make this move. In 2017, installment payments worldwide amounted to $1.2 trillion, according to Visa. It further noted that these figures are growing at a 15% annual rate and are at double the rate for credit card payment volume. Additionally, fintech companies, like Affirm, which has partnered with retail giant, Walmart, also have leapt into the market.

For more than a decade, PayPal has been in the business. In 2008, it acquired the startup, BillMeLater to offer credit options to buyers at online sites. Today, this service is referred to is as PayPal Credit.

Mastercard’s move to acquire Vyze in April may be the real trigger for Visa. Through Vyze’s technology, merchants can offer point-of-sale installment-payment options from a wide range of creditors. It is a quick and easy option that allows consumers can choose to use while standing at checkout.

The Final Say on Installment Payment APIs

Fintech companies vigor in this area, as well as the move by Mastercard and Visa, show that this is a growing market that both consumers and merchants are embracing. In fact, the New York City-based consultancy, Auriemma Consulting Group, issued a survey that showed 40% of debit card holders would be more inclined to use point-of-sale credit for even common products, including groceries.

With all this in mind, the payments industry should expect installment payments APIs to become a major payment method. How much it will grow will be anyone’s guess.

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