Visa Expands Payment Options for Amazon Customers with Installments Plans

Rhea-AI Summary

Visa has partnered with Amazon to offer installment payment options to Canadian customers. This new feature is available to eligible Royal Bank of Canada (RBC) and Scotiabank credit cardholders. They can now choose to pay for Amazon purchases in smaller, fixed payments over time. According to Visa research, 58% of Canadians are interested in using installment payments, and it is projected that by 2026, installments will account for nearly one-quarter of global e-commerce transactions. Visa aims to meet the growing demand for flexible payment options, providing a better end-to-end payment experience for Canadian consumers.

Positive

• Visa's collaboration with Amazon brings a new installment payment option to Canadian consumers.
• Eligible RBC and Scotiabank credit cardholders can now select Installments enabled by Visa for purchases on Amazon.ca and the Amazon app.
• According to Visa research, 58% of Canadians are interested in installment payments.
• Installments are projected to account for nearly one-quarter of global e-commerce transactions by 2026.

Negative

• None.

Insights

Financial Analyst

Visa's collaboration with Amazon to offer installment payment options for RBC and Scotiabank cardholders in Canada could have significant implications for both companies. For Visa, this partnership enhances its footprint in the e-commerce sector, potentially driving higher transaction volumes and interchange fees. From a financial perspective, the move aligns well with the growing consumer preference for flexible payment options, which Visa's research predicts will account for nearly one-quarter of global e-commerce transactions by 2026. This strategic initiative is likely to boost Visa's revenue stream and user engagement over the long term.

For Amazon, offering installment plans could increase average order values as consumers may feel more comfortable making larger purchases. This could also contribute to higher customer retention and satisfaction, potentially translating to increased long-term revenue. Notably, the integration of installments could enhance the overall shopping experience by providing greater financial flexibility and control for customers.

In the short term, both companies may incur additional costs related to the integration and marketing of the new payment option. However, the potential long-term benefits, such as increased transaction volumes and customer loyalty, appear to outweigh these initial expenses. Investors should monitor how quickly the installment option is adopted and whether it drives the anticipated growth in transaction volumes and customer engagement.

Market Research Analyst

The introduction of installment payment options by Visa and Amazon taps into a growing consumer demand for flexible financing solutions. According to Visa, 58% of Canadians are interested in using installments, which indicates a substantial market opportunity. The move is expected to cater to the evolving needs of consumers who prefer to manage their finances through smaller, predictable payments.

This partnership could also set a precedent for other e-commerce platforms to follow suit, potentially making installment payments a standard offering in online retail. By being early adopters, Visa and Amazon stand to gain a competitive advantage in the Canadian market and possibly influence purchasing behavior across other regions.

However, there are potential drawbacks to consider. The adoption rate of installment payments will depend on several factors, including customer awareness, ease of use and perceived financial benefits. If the option is not effectively communicated or integrated seamlessly into the checkout process, the expected increase in transaction volumes may not materialize. Additionally, there could be concerns about consumer debt levels and their ability to manage installment payments responsibly.

Overall, the initiative appears to be a positive development for both companies, provided that they can successfully navigate these challenges and capitalize on the growing interest in flexible payment options.

The flexible payment option is now available to eligible Royal Bank of Canada (RBC) and Scotiabank credit cardholders shopping in Canada in the Amazon store

TORONTO--(BUSINESS WIRE)-- Visa has announced a new collaboration with Amazon that will provide Canadian consumers with more choice at checkout. When shopping online on Amazon.ca or on the Amazon app, eligible RBC and Scotiabank credit cardholders will now have the option to select Installments enabled by Visa as their method of payment for qualifying purchases. This convenient payment option is now available and enables eligible consumers to convert their purchases into smaller, fixed payments made over a defined period.

"We are excited to offer our installments solution on Amazon through two of Canada’s leading issuers, granting more consumers access to diversified payment methods and greater financial control with one of the world's largest online merchants," said Dan Sanford, Head of Product for North America at Visa. "Recognizing the growing demand for flexible payment options, we are committed to enhancing the end-to-end payment experience for Canadians to address their evolving needs.”

Installments are gaining momentum in Canada as a preferred payment method among consumers. According to Visa research, more than half of Canadians (58%)¹ are interested in using installments and it is projected that by 2026, this payment method is expected to account for nearly one-quarter of all global e-commerce transactions².

“At Amazon we are always looking to innovate and improve the shopping and paying experience for our customers,” said Tyler Aldrich, Director, Amazon Payment Products. “Together with Visa, we’re pleased to offer customers greater choice, enabling customers to pay for their online purchases in ways that are convenient for them.”

Installments enabled by Visa provides issuers, processors, and merchants with a better payment option to meet customers where they are. Together, Visa and Amazon are working to bring this payment option to more consumers around the world.

For more information on Visa Installments, visit Visa.ca/installments.

About Visa

Visa (NYSE: V) is a world leader in digital payments, facilitating transactions between consumers, merchants, financial institutions and government entities across more than 200 countries and territories. Our mission is to connect the world through the most innovative, convenient, reliable and secure payment network, enabling individuals, businesses and economies to thrive. We believe that economies that include everyone everywhere, uplift everyone everywhere and see access as foundational to the future of money movement. Learn more at Visa.com.

¹ Visa Canada BNPL Trends Research – Q1 2023

² Global Payments, “Why buy now, pay later is a trend to watch”, March 2023

View source version on businesswire.com: https://www.businesswire.com/news/home/20240627516529/en/

Media

Tracy Truong, Visa Canada

trtruong@visa.com

Source: Visa Inc.

FAQ

What new payment option has Visa introduced for Amazon customers in Canada?

Visa has introduced installment payment options for eligible Royal Bank of Canada (RBC) and Scotiabank credit cardholders shopping on Amazon.ca and the Amazon app.

Which credit cardholders can use Visa's new installment payment option on Amazon?

Eligible Royal Bank of Canada (RBC) and Scotiabank credit cardholders can use Visa's new installment payment option.

What percentage of Canadians are interested in using installment payments?

According to Visa research, 58% of Canadians are interested in using installment payments.

By what year are installments projected to account for nearly one-quarter of global e-commerce transactions?

Installments are projected to account for nearly one-quarter of global e-commerce transactions by 2026.

Where can I find more information on Visa Installments?

More information on Visa Installments can be found at Visa.ca/installments.