The Complete Guide on Split Payments: Examples, Use, and Advantages

In some instances, customers may not want to pay the full amount at once. Giving them flexible ways to pay makes shopping easier and more attractive. A 2024 report by PYMNTS said that 70% of shoppers are more likely to buy if they can choose how to pay.

Split payments are one way to provide this flexibility, allowing multiple payment methods for a single transaction. This option is becoming more popular across various businesses, making it easier for sellers to meet customer needs. If you’re looking for ways to make transactions smoother, exploring split payments could be the next step for your business. Let’s dive deeper into how this can work for you.

Breaking Down the Concept of Split Payments

Split payments let customers divide the total cost of a purchase using different payment methods. Instead of using just one card or method, they can use two or more to pay for a single transaction. For example, a customer can use one card for part of the payment and another card or method, like PayPal, for the rest. This is especially useful if a customer doesn’t have enough funds in one account to cover the entire cost.

It’s also handy when a group wants to share the cost of something, like a meal or a gift. Everyone can pay their part with their preferred method, making things easier and fairer for everyone involved.

A Deeper Look at How do Split Payments Work

Split payments function by allowing customers to divide their payments across multiple payment methods. Here’s how it works:

1. Choosing Payment Methods: When customers are ready to pay, they decide how to split the payment. For example, they might pay ₹500 with their debit card and the remaining ₹500 with a mobile wallet or credit card.
2. Payment Processing: The payment system or gateway processes each payment separately. It checks that the total amount, like ₹1,000, is paid fully, even if it’s coming from different sources.
3. Confirmation: Once the system confirms that all parts of the payment are made, it processes the transaction and completes the purchase.
4. Money Collection: As a seller, you receive the full ₹1,000, even though the payment came in parts. The system tracks each payment method separately to see how the money was split.
5. Customer Flexibility: This process allows customers to use multiple cards and wallets or even ask someone else to pay part of the bill. It makes shopping easier for customers with insufficient funds in one place.

So, whether you run a physical store, an online shop, or a service-based business, allowing people to split payments helps close more sales. It makes buying easier for your customers and ensures you get paid without delays.

Applications of Split Payments Across Industries

Split payments are helpful in many types of businesses. 

1. Retail and Food Businesses

In shops, salons, restaurants, and cafes, split payments are often used when people visit groups or want to pay using different methods.

• A group dining at a restaurant can each pay their share using a card, cash, or wallet.
• A customer at a clothing store can use a gift card and a debit card together.
  This helps you avoid the hassle of collecting full payment from one person and improves the overall customer experience.

2. eCommerce

Online stores can offer split payments at checkout to help customers complete their orders.

• A buyer can use two credit cards or a card and a gift voucher.
• It prevents cart abandonment when the buyer doesn’t have enough balance on one card.

This feature is handy during sales or festive seasons when shopping budgets are stretched across multiple accounts.

3. Service-Based Businesses

If you’re providing services like marketing, events, or freelance work, large payments can be split into smaller parts.

• For example, a ₹1,00,000 project can be billed in milestones—₹30,000 upfront, ₹30,000 midway, and the rest at the end.
• This helps clients manage payments and ensures you’re paid steadily throughout the project.

4. Subscription Models

Businesses like gyms, software companies, or insurance providers can set up recurring payments.

• Customers can pay monthly, quarterly, or yearly.
• Payments can be collected automatically via cards or direct bank transfers (ACH/EFT).

This avoids missed payments and saves time for both sides.

5. Education and Utility Services

Even schools, colleges, and utility providers can allow families to split payments.

• Two parents or family members can pay fees from different accounts.
• It makes managing expenses simpler and reduces payment delays.

The Top Benefits of Adopting Split Payment Solutions

Adopting split payment solutions can bring a range of advantages to your business. Offering flexibility in how customers pay can make a big difference, improving sales and customer satisfaction while simplifying payment processes. Here’s a deeper look at the key benefits:

Offering services or subscription split payments can help you manage cash flow more effectively. Service providers, for example, can break down large payments into manageable stages, such as billing in milestones. 

1. Fewer Abandoned Carts: Sometimes, customers want to buy something but don’t have enough money on one card or wallet. With split payments, they can use two or more methods—like a credit card and a gift card, to pay for the full amount. This means they can still complete their purchase instead of leaving it halfway. For you, it means fewer abandoned carts and more successful orders.
2. Better Shopping Experience: Offering split payments makes the buying process easier and smoother for your customers. It gives them more control over how they want to pay. They can pay using any mix—credit card, debit card, cash, or digital wallets. This is also useful when a group wants to buy something together like friends sharing the cost of a gift or meal. When people can pay their way, they’re happier, leading to a better user experience.
3. Higher Sales and Bigger Orders: Customers often hesitate to buy expensive items if they must pay the full amount from one source. However, saying yes to a bigger purchase becomes easier when they know they can split costs between different methods. This can help you sell more and increase your revenue. It’s especially useful during festive sales or holiday seasons when people spend more and manage budgets.
4. Payment Flexibility for Customers: Split payments are very helpful for customers who don’t have enough money in one place. Instead of walking away from the purchase, they can use two cards or mix a gift card with a credit card to cover the cost. It helps them buy what they want without stress. For you, it means more completed transactions and happy buyers.
5. Better Cash Flow for You: If your business offers subscriptions or services that are paid over time, split payments can greatly help you with cash flow. You can set up systems that collect money in parts or on time without waiting or reminding customers again and again. This means your cash keeps coming in regularly, making it easier to manage your business.
6. Attract More Customers and Keep Them: There are many customers who want to buy but hold back because of money limits. When you give them the option to split their payments, it makes things easier for them. They feel more comfortable buying from you and are more likely to return. This helps build trust and grow your customer base over time.

Shiprocket Checkout: Powering Flexible Payment Experiences

A fast and easy checkout can make a big difference for your business. With Shiprocket Checkout, your customers can complete their orders in just 40 seconds, making it quicker and smoother. This helps reduce cart abandonment and increases customers’ chances to finish their purchases. The address auto-fill and multiple payment options make it even easier for them to check out.

Setting up Shiprocket Checkout is simple. After a quick consultation, everything is ready to go. Your customers can check out with just one click, skipping all the repetitive form-filling. This makes the buying process faster, leading to more completed orders.

Shiprocket Checkout gives you helpful data on customer behaviour so you can make better decisions for your business. You can also customise the checkout page to match your brand, giving customers a personalised shopping experience.

Conclusion

Split payments offer a convenient and flexible way for customers to make purchases. By providing various payment options, you can improve your customer’s shopping experience, reduce cart abandonment, and increase conversions. 

Whether it’s for in-person transactions or online purchases, adopting split payments can help your business stay competitive and cater to customer preferences. Embracing this solution can simplify payments and strengthen customer trust, encouraging repeat business and positive word-of-mouth.