How it works
Affirm, Klarna and Afterpay are lenders. In Stripe, they show up as payment methods, alongside the card.
At checkout, the customer picks the lender. They're sent to the lender's site, where they open an account or log in, then accept an instalment plan. They come back to your site, and the sale is made.
On your side, Stripe makes the full amount available, minus fees. The customer repays the lender. You have no instalments to collect, no expired card to chase in the seventh month.
That's the whole difference from an in-house instalment plan, where the business waits for its money month after month and chases missed payments.
The steps, in order
Check that your business is eligible
It's the first step, and the one people forget. Each lender has a list of prohibited or restricted business categories, which Stripe publishes in its documentation. None of the three finances sales between businesses: it's for sales to individuals.
Service businesses need to look closely. At Affirm, consulting and professional services are excluded, and educational services are on the restricted list. Stripe can review an account after activation. Better to know before building a sales page around instalments.
Turn on the lenders in Stripe
If you take payments with Stripe Checkout, Payment Links or Stripe's embedded payment form, activation happens in the payment method settings, with no code. Stripe then shows each customer the methods they're eligible for, based on their country and the amount.
A hand-built payment form requires development.
Mention instalments before checkout
A customer who discovers instalments at the moment of paying has already decided whether the price was too high. We announce them on the sales page, next to the price. Stripe provides a display element for that. Lenders have their rules on how to talk about it, and they have to be followed.
Carry the sale through
A financed sale has to land in your CRM like any other: who bought, what, and by which method. Otherwise, someone keeps a list on the side.
Plan for refunds and disputes
A refund is made in Stripe. The lender then cancels the remaining instalments and returns what the customer has already paid. There's a window for doing it.
When a customer disputes, Stripe holds the amount and gives you a few days to provide your evidence. For a service, that means keeping a record: the contract accepted, the access given, the sessions held.
The pitfalls
- The amounts. Each lender has a minimum and a maximum, which vary by country. Paying in four instalments covers small amounts. Financing over several months covers large ones. For an expensive program, we check the maximum before anything else.
- The country. A business here sells to customers here. These lenders aren't for selling in instalments to a customer in another country.
- The fees. They're higher than a card's. That's the price of being paid right away. We count them in the margin before going ahead.
- Declines. The lender doesn't approve everyone. There needs to be another path for the declined customer, otherwise the sale is lost.
- The website. Affirm requires a public website, with prices shown in the customer's currency.
What we did for five coaching businesses
A coaching business sells an expensive program. Few clients pay all at once, so they're offered instalments. The sale is made, but the money comes in over months.
For five coaching businesses, we connected Affirm, Klarna and Afterpay through Stripe, in the sales flow. The customer chooses to pay the lender in instalments. The business tracks its sales in its CRM, GoHighLevel.
The business receives the full amount at the sale. The customer repays the lender in instalments.
When it's not the right solution
If you sell to businesses, these lenders aren't for you. We look at invoicing with payment terms instead.
If you sell a subscription, Stripe's recurring billing does the job, by card. It can also spread a fixed amount over a set number of payments. In that case, you're the one waiting for the money and carrying the risk.
If your margin is thin, the lenders' fees can eat it. Do the math before, not after.
And if your business category is excluded, there's no way around it. Better to find out before putting the sales page online.
This connection is part of what we call making your tools work together: the payment, the sales page and the CRM. The rest is on our page Digital transformation.