Risks, options and alternatives when selling in installments
If you charge 4-digit or even higher prices for your coaching, services or courses, you will certainly often be asked whether you can offer installment payments.
The temptation is great to simply offer payment in installments to close the sale. At first glance, paying in installments seems like a win-win for everyone. Your customers are more willing to buy and their financial burden is spread.
And you get your money ...
At some point. Maybe. But maybe not.
Are installment payments safe for companies?
You bear the risk of non-payment yourself. But is it really risky to sell in installments? Let's take a look at the data.
More than 20,000 installment payments are processed via ablefy every year. In the higher-priced segment, end customers often ask whether they can pay in 2 or 3 installments.
But the higher the amount and the more installments, the higher the risk to your cash flow.
65% of installments are paid late
- Customers forget to pay their installments.
- You have to wait for your money.
20 % of the installments are not paid at all
There may be various reasons for this, such as financial problems, a dispute with the provider or unfulfilled expectations.
If no agreement is possible, you can forward outstanding claims to the dunning and collection service of ablefy, but:
- the service is only available from Advanced 3.0 Plan available
- 80 % of the outstanding payments can be collected, a residual risk remains
- The relationship with customers can be damaged by debt collection
- Even if successful, the procedure will take at least 4 weeks
Suppliers must pay the VAT immediately
- In the case of installment payments, the VAT for the full invoice amount is due immediately
- If a payment is not made, suppliers must reclaim the VAT
How do you solve the installment payment dilemma?
Some entrepreneurs are firmly against installment payments. For others, this option is the industry standard. ablefy offers you various options to choose from.
Prefer one-off payment
✅ The safest way to get paid
Particularly advisable for products under €500
Less flexibility for customers - may reduce the number of sales
Bear the risk of installment payments
✅ More flexibility for customers
✅ ablefy offers functionsthat reduce the risk of non-payment
❌ Disadvantageous for your cash flow
Use Buy Now Pay Later providers
Offer customers flexibility
✅ Secure your own cash flow
❌ Higher transaction fees
In this article, we present all of these options so that you can make the right decision for your company!
Option #1 Klarna Pay Later
Klarna is one of the most popular payment methods after PayPal. Since the end of 2024, you can activate Klarna in all ablefy 3.0 plans for your sales. With Klarna, your customers have more payment options even if you only offer one-time payment.
- Instant bank transfer
- Purchase on account with payment within 30 days
- Interest-free installment payment with up to 4 installments
- Interest-bearing financing completely independent of you
- New: Use Klarna also for subscriptions
For you, Klarna is a risk-free alternative to paying in installments, because:
✅ You receive the entire amount immediately
Possible dunning or collection procedures are taken over by Klarna
➕ Increase sales by up to 30% through higher acceptance and trust
Restrictions:
❌ Only sale to private individuals (B2C)
❌ Maximum product price limit in Germany: 5.000 €
Notes:
📌 Higher transaction fees:
- 2.9 % in addition to the regular fees + € 1 fixed amount for DACH sales
- 4.9% in addition to the regular fees + €1 fixed amount for international sales
📌 Available countries: 
📌 Available currencies:
✅ EUR, GBP, CHF, PLN
❌ No USD
Option #2 PayPal Pay Later
PayPal also offers various payment options within the payment process.
- Instant bank transfer
- Purchase on account with payment within 30 days
- Financing in 3 or 4 installments
The advantages are similar to Klarna:
✅ You will receive your money immediately
✅ High level of acceptance (35 million customers in Germany)
✅ 100% protection for you and your customers
✅ Express checkout and promotion badge on the product page highlight the option
Notes:
- Available countries:
- In Germany, only "Pay in 30 days" or interest-bearing installments are available
- Only fully usable with the PayPal connection Rest V2. If you sell on ablefy in your own name, you can find instructions here.
- You can also use Rest V2 in the reseller model. Please contact ablefy customer support for advice on the benefits and restrictions.
- ablefy providers in the reseller model use the PayPal connection NVP by default. Pay Later is also possible here, but the option is not displayed on the ablefy payment page, but in the PayPal Wallet (see image).
Option #3 Limited subscription with minimum term (new since March 2025)
Advantages over installment payments:
✅ No advance payment of VAT (VAT is paid per installment)
✅ Separate invoice for each installment
📌 Example:
- 4 weeks of coaching with weekly sessions → Limited subscription (VAT per installment)
- 1 week of coaching with 4 monthly installments → Payment in installments (VAT on the first installment)
❌ Risk remains: Buyers can still skip payments
📌 For installment payments, subscriptions and trial periods, it is best to use payment options that allow automatic direct debit.
You can find out what these are in the next section.
Option #4 Installment payments with automatic debit
If your customers simply tend to forget to pay in installments, this method will help you.
✅ Automatic debiting works for sales in installments, but also for subscriptions and limited subscriptions with the following payment methods:
- SEPA direct debit
- Credit card
- Google Pay
- Apple Pay
- PayPal in the reseller model
- PayPal NVP for sales in own name
Other payment methods such as prepayment do not offer the direct debit option. In this case, customers must think about the bank transfer themselves.
❌ This variant does not protect you from chargebacks by the buyer
Conclusion: to offer installment payments or not?
Each of the options mentioned has its advantages and disadvantages. Which option is right for you depends on various factors.
You can best assess the risk of non-payment because you know your customers best. If their payment behavior is good, you will probably have fewer problems. Even if your customers only pay in 2 installments, the probability of non-payment is lower.
If you sell a product under €5,000 in the private sector or have many sales per month, Klarna and PayPal as Pay Later options are the least stressful method. Even in the event of non-payment, you don't have to deal with payment reminders or debt collection. This also makes the higher transaction fees worthwhile. In addition, popular payment methods such as Klarna and PayPal ensure a better conversion rate.
However, we at ablefy generally advise you to only offer installment payments in individual cases or on request.
For example, you can create a separate product with only the installment option and send it out in a targeted manner. Ideally, you will have spoken to the prospective customers beforehand and will be able to assess them better. This way, your offer is based on trust and only goes to customers who have had personal contact with you.
If something does go wrong, ablefy can send you a reminder for outstanding installment payments or hand them over to debt collection.
We hope this article helps you to make your cash flow more efficient and to make an informed decision on the subject of installment payments.
