In the past, installment plans were reserved for credit products like loans, where you borrow money from a lender and pay it back over time. These days, however, there are many people looking for easier and more affordable ways to make buy now, pay later purchases. That’s why Visa recently introduced its installment payment service.
What Is Visa’s Installments Payment Solution?
Similar to a loan, Visa installments allow you to purchase items upfront and finance them over a predetermined period with equal monthly payments. That said, this new solution acts much like a traditional Visa credit card. Any expenses you take on will get charged directly to your existing credit card account, rather than you having to borrow money.
The program was introduced in July of 2021 in collaboration with Scotiabank, CIBC, and Global Payments with Desjardins. Due to the convenience they offer, as well as the impact that the coronavirus pandemic has had on the job market, Visa’s installment payment solution is now becoming popular among Canadian cardholders and participating merchants alike.
Visa Installment Payment Options
With Visa installments, there are 3 payment models you can sign up for:
Pre-Purchase
If you choose pre-purchase payments, it means you’re agreeing to make Visa installments before you actually buy your item(s).
During Purchase
When you shop and checkout online or in-store, participating merchants will offer Visa installments as one of their payment options.
Post-Purchase
If you prefer, this payment program also allows you to convert your recent credit card purchases into Visa installments after the fact.
Benefits Of Visa Installments
There are plenty of things to enjoy about buy now, pay later programs like Visa installments, including but not limited to:
- Affordability – Primarily, Visa installments are great because they allow you to divide costs into equal payments that take place over several months if needed.
- Less Interest Charged – Another major upside to Visa installments is that they come with better interest rates (often zero interest) than other credit products.
- Convenience – Visa installments are easy to qualify for and are made via your digital wallet. There’s less danger of overspending or surpassing your credit limit too.
- Your Credit Doesn’t Have To Be Perfect – Unlike with other credit products, you don’t need a fantastic credit score to become eligible for Visa installments.
Risks Of Visa Installments
Despite the benefits of Visa installments, the program is still relatively new and there are certain risks involved with “buy now, pay later” programs in general, such as:
- Potential Credit Damage – Since Visa reports their clients to Canada’s credit bureaus, any late or missed installments may have a negative effect on your credit.
- Financial Risks – Missing installments can also lead to penalty fees. Plus, your payments may continue after you’ve returned an item unless you inform Visa.
- No Rewards Available – While this program is offered through Visa, you won’t receive any benefits or cash-back dollars, as you would with most credit cards.
- It’s Tough To Track Payments – The Visa installments payment system isn’t perfect yet, so it can be difficult to remember when all your payments are due.
Who Offers Visa Installments?
As mentioned, there are several big-name financial institutions that now offer Visa installments as a payment alternative in Canada, including:
Scotiabank
Being one of the Visa installments program’s main collaborators, Scotiabank features SelectPay, which allows you to convert qualified credit card purchases of $100 or more into fixed monthly installment plans with zero interest and low service fees.
To get approved for a Scotiabank SelectPay plan, you must:
- Have a Scotia OnLine or mobile banking account that’s in good standing
- Be a resident of a province or territory other than Quebec
- Make an eligible purchase of $100 or more with a qualified Scotiabank card
- Be the primary cardholder of one of the following Scotiabank credit cards:
- Scotiabank Value® Visa*
- ScotiaGold Passport® Visa*
- Scotiabank Passport™ Visa Infinite*
- Scotia Momentum® No-Fee Visa*
- Scotia Momentum® Visa*
- SCENE®* Visa*
- Scotia Momentum® Visa Infinite*
The best benefits of Scotiabank SelectPay™ include:
- Zero interest and low fees are applied to all installment plans
- Flexible payment plans of 3, 6, or 12 months are available
- Can be easily managed using your Scotiabank OnLine or in-app account
- You’ll receive the same benefits as your Scotiabank Visa credit card
- You can cancel your SelectPay account anytime, without penalties
- No impact on your credit score
Canadian Imperial Bank of Commerce (CIBC)
If you make large or unexpected purchases, like renovations or travel expenses, CIBC features a similar program called CIBC Pace It, which allows you to pay them off using installment plans of 6 (5.99% APR), 12 (6.99% APR), or 24 months (7.99% APR).
To qualify for a CIBC Pace It Installment Plan, you must:
- Be registered for a CIBC Online or Mobile Banking account
- Make a purchase of $100 or more using a qualifying CIBC credit card
- Be a resident of a province or territory other than Quebec
- Be the primary cardholder of an “Eligible for Installments” CIBC card (most personal Visa or Mastercard credit cards are acceptable)
The most notable benefits of CIBC Pace It include:
- One-time installment fees of 1.50% (of the purchase amount)
- Zero effect on your credit score
- Installment Plans are very easy to set up (only 3 steps required)
- You can create multiple Installment Plans (depending on your credit limit)
- You can continue to earn CIBC credit card rewards on your purchases
- Special interest rates are available when you make eligible purchases at Costco using a CIBC Costco® Mastercard (with no installment fees)
Looking For a More Affordable Way to Cover Your Expenses?
Then Visa Installments can be an excellent and flexible alternative, as long as you act responsibly and make all your payments on time. Although it’s still in its first stages, there’s no telling how much this new program will grow within the next few years. Contact Visa or your financial institution to see if you’re eligible for Visa Installments.
