The Ultimate Guide To Offering Partial Payments in Magento 2
The key to long term success in eCommerce is providing the greatest convenience to customers. Of course, convenience is a wide term and encompasses a wide range of things. For example, offering regular promotions is convenient for customers as it helps them save money. Likewise, optimising the website for better navigation is convenient for users as it helps them find the relevant page without any hassle.
However, as the title indicates, this article is not about website navigation or promotional strategies. Instead, we are focusing on partial payments in Magento 2. Of course, selecting the right pricing strategy is critical to success in any business. If prices are too low, the business may never turn a profit. If they are too high, the audience may prefer another store with competitive prices.
Selecting the Right Pricing Strategy
Based on our experience and interaction with clients, there is no one best pricing strategy. Instead, businesses (online or brick and mortar) need to base their pricing according to the target audience, their buying power, and overall purchasing behaviour. This is the most straightforward method. However, this method may not result in the highest returns.
The reason is that only people with the required funds can buy your products. What if others want your product but cannot afford to pay upfront? Doesn’t it make sense to offer them a way to buy your product without offering hefty discounts or compromising on the store’s financial viability? To prevent cart abandonment due to such issues, you can introduce partial payment plans, popularly referred to as ‘Buy Now Pay Later’.
What is the Partial Payment Plan in Magento 2?
According to the BNPL payment method, users without adequate funds can fulfil their needs and wants by paying a part of money at the time of purchase. The remaining amount can be divided into equal instalments which they can pay monthly. Usually, most brands offer 3-, 6-, 9-, and 12-month instalment plans. If user wants more months, brands usually charge an interest.
When Offer Partial Payments?
Partial payment option is more suitable for online stores that are either selling expensive items. With this payment option, you can motivate your customers to buy product with a minimal cost and pay the rest of amount in easy instalments. When you offer customer to buy products in instalment, you are on the brink of winning sales and loyal customers.
Why Will Partial Payments Help to Increase Sales?
According to the below table, BNPL or partial payments are quite popular worldwide.
As can be seen, the total value of BNPL transactions stand at $316 billion, accounting for 5.1% of total eCommerce transactions. Therefore, if you are looking for ways to increase your Magento 2 sales, you must consider offering partial payments.
What are the Benefits of Using Partial Payments?
Here, we’re going to list the benefits of partial payments to give you a better idea to integrate partial payment option in your store:
Increase Conversion Rate
As said earlier, BNPL payment methods allow Magento 2 store owners to target users who wish to buy the product but can’t afford to pay upfront. Naturally, when you start offering partial payments in Magento 2, you’ll notice an increase in conversions.
Attract Low Budget Buyers
Low budget buyers may not be your target audience, but they can still add to your store’s revenue.
Budget Conscious Consumers
Many individuals and families have a set budget. They are unlikely to make purchases which affect their budget. BNPL allows such buyers to purchase an item without affecting their budget.
Improve Customer Loyalty
Naturally, if you take steps to provide convenience to the users, they will reward you with greater loyalty. They may promote your brand with positive word of mouth, engage in repeat purchases, and recommend others to shop at your store.
How Does Partial Payment Work in Magento 2?
Merchants have numerous options when it comes to partial payments in Magento 2, including:
- Create partial payment plans for all or specific products and let the customers choose to buy the product in instalment.
- Set the total number of instalments, instalment period unit (like monthly, weekly, etc.), due date & down payment.
- Draft & customize the reminder emails and send automatic payment reminders. Customers will have to pay the scheduled instalment on or before the deadline.
- Admin can also charge the instalment payment processing fee to generate extra revenue.
How Do I Set Partial Payment in Magento 2?
To configure partial payment in Magento 2 store, download and install Partial Payment Extension by FME – the best tool to add partial payment option to your store. When you’ve installed the extension, follow these steps to configure partial payment plans:
In admin panel, Click Store on left sidebar >> Configuration
In General Settings Tab
- Enable Partial Payment Extension - Select Yes
- Enable Partial Payment for all Products - Select Yes
- Choose Allowed Payment Methods to avail partial payment
Now Click Global Configuration Settings Tab
- Down Payment Calculation Type – You can set down payment (initial payment) as a Fixed Price or Percentage Price
- Enter Price/Percentage for Down Payment - You can set down payment (initial payment) as a Fixed Price or Percentage Price of the product price. E.g. 10% of product price or fixed price like $10.
- Enable/Disable Option to Calculate the Deposit before Discount (if offered)
- Layaway Fee – You can charge the installment payment processing fee Per Product or Per Order (all products in a single order)
- Set Max. Period of Installments – set max allowed installments
- Set Installment Period Unit like Day, Week, Month, Year
- Set Installment Period – You can set 1 month, 2 weeks, etc.
Labels Tab
- In Label Tab, admin can configure partial payment Labels
Email Configurations - Global Layaway Plan
- Set Email Address, Enable Auto Reminders
- Configure Email Reminder Frequency
- Select the desired Email Template
- Save the Configurations.
Partial Payment in Magento 2
When, you are done with the configurations, then, this is how Partial Payment option looks like on product page.
Customers can pay installment right on order detail page in their account section.
Admin can manage all the partial payment orders in single grid & create partial payment plans on behalf of customers as well.
Admin has the option to approve/disapprove the customer request for installment payment.
Final Thoughts on Magento 2 Partial Payment Plan
This concludes our article on Magento 2 partial payment plans. As the discussion confirms, this payment method is ideal for stores offering high-value items. It allows them to increase their sales by targeting budget-conscious or low-budget users. For more details regarding partial payment configuration in Magento 2, refer to this tutorial. If you need any help, feel free to contact our support team .
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