FuturePay hopes its alternative credit model can shake up in-store payments as the company plots to go beyond its e-commerce roots.  

This desire goes hand-in-hand with digital merchants' desire to deliver an omnichannel shopping experience despite accepting payment methods that do not work across all channels.

"We have retailers in e-commerce that also have brick and mortar stores and want to offer FuturePay in those stores," said Bobbi Leach, CEO of FuturePay.

FuturePay, which launched in 2012, mines the e-commerce space for larger purchases that usually can't be paid for all at once. Shoppers add items to their cart, and FuturePay fronts the money to the retailer. The shopper then makes monthly payments to FuturePay, plus a flat fixed fee instead of an interest rate. Retailers pay a processing fee to FuturePay.

The company considers this a "more transparent" alternative to rate-driven credit card model, and has partnered with e-commerce networks such as Magento and Shopify to quickly build a merchant base. FuturePay has reached a total of 500 merchants and a dozen e-commerce network partnerships in the past two and a half years.  

FuturePay is developing an in-store version of its service that it plans to launch by the end of the first quarter. FuturePay is also in discussions with mobile point of sale technology providers to add a hardware component to the in-store model, which would improve payment processing and broader merchant services, Leach said.

"Our main push right now is making sure that FuturePay can be delivered through an omnichannel strategy," Leach said.  

The widespread point of sale upgrades accompanying the introduction of EMV-chip cards are providing a window of opportunity for all sorts of other payment technologies, Leach said..

Installment payment companies are also getting more aggressive. The practice is widely used in Europe and Latin America, but is still developing in the U.S. PayItSimple, which also makes the full payment up front and then collects monthly payments from consumers, recently partnered with North American Bancard to expand in the U.S.  Affirm offers installment payments, and PayPal Credit works in stores as well.

"Even though e-commerce now accounts for 10% to 15% of retail sales and continues to grow, offline commerce still has the lion's share with more than 80% of volume," said Zil Bareisis, a senior analyst at Celent. "Capturing even a slice of this is very attractive for e-commerce companies. Not being limited to e-commerce also opens the door to multichannel merchants."

Writing in PaymentsSource, Alon Feit, PayItSimple's CEO, said interest-free installment payments account for as much as 57% of all card purchases in Europe, with more than 80% of payments in Brazil coming from card-based installment plans. Feit estimates there are millions in purchasing power unused due to the low adoption of installment plans.

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