If you run a business in Italy—whether ecommerce or a physical store—you might have noticed that customers appreciate flexible payment solutions. Installment payments for stores—known as buy now, pay later (BNPL)—have become a key competitive method, especially for midrange to high-end products.

This article explores installment payments, including their increasing use online and in-store and how businesses can integrate them in a practical way. We also examine in-store installment payment management from an accounting perspective, partial payments, and invoices that comply with Italian tax regulations.

What’s in this article?

• What are installment payments?
  
• Statistics on installment payments in Italy
  
• How online installment payments work
  
• How installment payments work in stores: Four available options
  
• How to integrate installment payments into online stores
  
• How to integrate installment payments into physical stores
  
• Accounting management for installment payments
  
• How to issue invoices for installment payments
  

What are installment payments?

Installment payments allow customers to obtain a product or service immediately and pay for it over time via recurring payments. For those who manage businesses in Italy, this solution can become a strong competitive advantage. Offering installment payments can help make high-value items accessible, increase conversion, and reduce abandonment during the purchase phase.

The installment payment process is the same whether the customer makes payments online or in-store. The customer receives their purchase immediately, and the payment provider manages future charges automatically. This can simplify administrative work. Therefore, installment payments can be an advantage for the customer and a tool to increase sales and overall satisfaction with the purchasing experience.

Installment payments: What are they?

Installment payments allow customers to obtain a product or service immediately and pay for it in several installments over time. It can be used for online and in-store purchases. The amount is divided into regular installments and automatically charged to the payment method the customer selects.

Statistics on installment payments in Italy

In Italy, there has been steady growth in the use of installment payments—both for online and in-store purchases. This trend is confirmed by market analyses that indicate continuous expansion in the total value of transactions managed through BNPL solutions. This is known as gross merchandise value (GMV).

According to the Italy Buy Now Pay Later Business and Investment Opportunities Databook 2024, the GMV of installment payments in Italy reached over $6 billion USD in 2023. Projections show that it could exceed $12 billion USD by 2029, nearly doubling in six years.

For those who run in-store or ecommerce businesses, these figures suggest that offering installment payments is an increasingly decisive competitive factor. Italian customers show growing interest in flexible payment options—such as installment payments—especially with midrange to high-end purchases. Integrating these solutions means responding to a real demand and preparing for a market that continues to rapidly change.

How online installment payments work

Installment payments for online purchases can be fully integrated into checkout. After the customer adds the product to the cart, the following steps occur:

• The customer selects the installment payment plan directly at checkout on the ecommerce site.
  
• The provider verifies the customer’s eligibility in a few seconds.
  
• The customer receives a clear and transparent installment plan, such as payments in 3, 6, or 12 installments.
  
• The customer confirms the purchase, typically paying a deposit and receiving the item immediately.
  
• The installments are automatically charged to the selected payment method without any further action.
  

BNPL’s ease of use is one of the reasons why installment payments for digital stores are gaining popularity. They can reduce the financial burden perceived by the customer, improve conversion, and increase the average order value. In addition, the system allows businesses to offer flexible payment terms without assuming the risk of nonpayment. Payment management is entrusted to the provider.

How installment payments work in stores: Four available options

In traditional retail outlets, installment payments work via advanced point-of-sale (POS) terminals, payment links, or payment apps that support installment plans. The customer can choose to defer payment at checkout. This is a quick and easy process that does not require the business to complete complex steps. Below, we describe the four main installment payment options for stores.

Installment payments via POS terminals

With many modern POS terminals, businesses can activate installment payment plans directly from the terminal. Here is the typical flow:

• The employee enters the amount on the POS terminal.
  
• The customer selects the installment payment option.
  
• The customer confirms on the terminal and accepts the plan.
  
• The provider handles the initial charge and subsequent installments.
  

This method is ideal for electronics, optical, and furniture stores, as well as for all businesses that want to offer modern solutions without introducing organizational complexity.

Installment payments via payment links

Many businesses choose an even simpler procedure that includes generating installment payment links. The business sends the link to the customer via text message, WhatsApp, or email. The customer opens the link on their smartphone, selects the installment plan, approves it, and completes the first installment.

Installment payments via Satispay

Satispay has introduced a feature called “Pay in 3,” which allows customers to split their purchases into three monthly installments directly from the app. Here are the steps:

• The business activates the Pay in 3 feature within their Satispay business profile.
  
• At the time of payment, the customer selects Pay in 3 instead of immediate payment.
  
• The customer receives the product immediately, and the business receives the full purchase amount.
  
• Satispay charges the customer for the three monthly installments and fully manages the repayment plan.
  

This solution allows stores to offer installment payments without the risk of nonpayment. This method also maintains the same ease of use as traditional transactions made through Satispay.

Installment payments via Pay-Oh

Pay-Oh is an Italian fintech solution that allows businesses to offer in-store installment payments in a simple and immediate way. Its operation is based on a BNPL model designed for the in-store experience.

For the customer, the typical process is quick. At the time of payment, the customer opens the Pay-Oh app, selects the amount to be paid, and chooses an available installment plan. This is generally from 3–36 months, depending on the service activated. After confirmation, the customer receives the product, and the business receives the full amount. Pay-Oh directly manages the financial process.

For stores, Pay-Oh is an innovative solution that is similar to online installment payment features but applied directly to physical points of sale. It is most useful for businesses targeting young customers or for midrange priced items. Installment plans can improve conversion rates at the time of purchase in these cases.

Comparison table of installment payment methods available for stores

How to integrate installment payments into online stores

Businesses can easily integrate installment payments into ecommerce stores. For example, Stripe Payments makes it a simple process because the platform provides immediate tools to activate BNPL solutions.

The fastest option is to activate installment payments directly from the Dashboard. You can enable installment payment methods without writing code. In this case, integration is particularly intuitive: a single activation allows eligible companies to accept various installment payment options without additional requests, checks, or technical configurations. This is thanks to dynamic payment methods that automatically display the most relevant options for each customer.

If you prefer a ready-made, optimized payment flow, you can use Stripe Checkout. It is a pre-integrated payment module that natively supports installment methods and automatically displays them when available. Alternatively, you can use Stripe Payment Links. This solution creates payment links containing installment payment options that you can insert into ecommerce sites or send directly to customers.

What are the best installment payment systems for ecommerce?

The best installment payment systems for ecommerce are those that offer fast approval procedures, transparent costs, and easy integration with the online platform. Among the most widely used are BNPL providers such as Klarna, Afterpay, Clearpay, Scalapay, and PayPal Pay Later. The choice depends on the industry, average order value, and desired checkout experience for customers.

How to integrate installment payments into physical stores

Even traditional retail outlets can offer installment payments swiftly and securely. There are two main methods:

• POS terminals with built-in installment plans
  Some advanced POS terminals allow customers to select installment payment plans directly at checkout. Customers use their cards or digital devices, accept the proposed plans, and complete purchases in seconds.
  
• Payment links
  Businesses generate links that activate installment payments. Customers open links from their smartphones and complete the installment payments.
  

Here are the main advantages of installment payments for businesses with physical points of sale:

• They offer the same flexibility as installment payments for online stores.
  
• They can increase the likelihood that customers complete purchases.
  
• Automated payment management by providers reduces the risk of nonpayment.
  
• Customers receive a modern and professional customer experience.
  

Accounting management for installment payments

The accounting management of installment payments can seem complex, but it is actually based on clear tax principles. When a customer purchases a product or service and chooses to pay for it in installments, the transaction remains a single sale from an accounting perspective. The time of the transaction—and value-added tax (VAT) liability—is determined at the time of delivery of the goods or completion of the service. This is not affected by payments being received in several installments.

Revenue recognition

In Italy, installment payments do not change the timing of the transaction, which occurs when the goods are delivered or the service is completed. Therefore, even with installment payments, the revenue must be recognized immediately.

Management of partial payments

The installments are recorded as partial payments linked to the same original invoice. Each collection must be recorded on the date of actual payment. It is important to use reconciliation systems that neatly associate each installment with the invoice issued. This helps businesses keep accounts clear and easily manage large volumes.

Risk management

For online stores with BNPL options, the risk of nonpayment is often transferred to the provider. This makes financial management easier and avoids complications in the event of outstanding payments.

Fees

Provider fees should be recorded as operating costs. It is good practice to keep a monthly statement to compare direct sales and installment sales for stores.

Taxes

VAT and taxation are not affected by installment plans because purchases remain single transactions. This greatly simplifies management.

How to issue invoices for installment payments

When a customer chooses to pay in installments, billing is managed according to specific rules. Even if customers make payments in several installments, businesses must issue invoices as single transactions. This is because the sales remain single transactions from a tax perspective.

The invoice must show the total amount of the goods or services sold, regardless of the number of agreed upon installments. In the description or notes section, indicate the installment plan (e.g., “Payment in three monthly installments”).

What to include on the invoice

The invoice should include the following:

• Total price
  
• Installment payment terms
  
• Additional costs charged to the customer (if provided for in the contract and permitted by law)
  
• Method of payment used
  

Providing this information gives the customer a transparent view of the entire transaction, and the business maintains accurate documentation for accounting and tax purposes.

Installment receipts and collections

Subsequent installments do not require the issuance of new invoices. If useful for internal management or communicating with the customer, it is possible to issue simple receipts or acknowledgments referring to the collection of individual installments. Each collection must still be correctly recorded in the accounting system and linked to the original invoice.

VAT

VAT is applied to the entire amount at the time the invoice is issued, as the tax is levied when the goods are delivered or the service is completed. The fact that the customer pays in several installments does not change how VAT is handled.

Organizational advantages

This system simplifies the management of installment payments because it separates the fiscal phase (e.g., single invoice) from the financial phase (e.g., split payments). This makes it possible to maintain orderly accounting even when installment sales volumes increase.