A payment plan is a program by a seller which permits a customer to pay off any outstanding debt by means of consolidation into an organized payment schedule. Within a payment plan, a customer pays back a fixed amount of money every month until the balance is clear.
Some payment plans are even made more flexible so that the customer can pay different amounts of money as long as they clear the balance in the allocated time period. No interest should be added to the price indicated on the customer’s invoice.
Now, this is not a thing that should be done by small and medium-sized companies. Luckily, we have official branches of many technology companies for example Tecno, Samsung, Apple, and Huawei. These are in a much better position to run such a program in partnership with some of the small and medium-sized businesses.
Why do we need payment plans?
Most of the reasons why we need payment plans to revolve around the flexibility of payment. In a country like ours (developing country), this would be the best way to boost the market for the technology industry.
1. You pay for something you want
Each of us might have had that one moment when we wanted something but we just could not afford it at the time. A time we wanted to acquire a really rare or expensive piece of technology but we were low on cash. And what did we do? We settled for less.
Maybe got an alternative that could do the job less efficiently. With payment plans, we could pay in instalments for what we want and work efficiently.
2. You can earn the money to pay for the instalments during the given period without saving first
Saving up cash to get a gadget we really need can be difficult for expensive gadgets mostly because technology is not a priority to the eyes of many and there will always be cheap alternatives. For example, a video editor would need a Mac Pro 2020 to improve his efficiency.
A gadget like that is roughly $15,000. Now, that is a lot of money to spend on a set up even for a rich person. If this person were allowed to pay $5,000 as a deposit and $10,000 in the course of 2 years, they would have to pay on average $417 per month to complete the payment. This would give them enough time to get the money to pay for the setup.
3. The payment period can be extended in case one does not get the money in time
Since payment plans are not done by small and medium-sized companies, if a customer is not able to clear an invoice, negotiations can be made to extend the payment period depending on the policies of the seller. This can really help to keep the customers a seller has in the long run.
4. The seller does not have to remind customers to pay. Money is deducted from the customer’s account automatically
There are systems in place to not only inform the customers about their balances and when they are due but also to collect money from customers automatically. An example of such a system is AutoPay which will collect money from credit/debit cards.
Why aren’t most sellers providing this?
I can only think of a few major reasons why sellers would not like this kind of payment system in Uganda;
1. Most sellers would consider a flexible payment program as a burden to maintain
Sellers would have to keep track of the progress of payment of their customers. This is more work to them, therefore, they wouldn’t like this.
2. Small and medium-sized technology businesses cannot afford to offer payment plans
This may be because they couldn’t afford new stock if they didn’t get a timely payment or because they have bills to pay like rent.
3. Most Ugandans use cash when buying gadgets
Many Ugandans rarely use their credit/debit cards for payment. They do not also use other online payment methods because of the charges deducted per transaction. It becomes hard to implement a payment plan when a buyer wants to pay in cash.
4. What happens if a customer cannot complete payment?
This should be the biggest reason why shops in Uganda do not offer payment plans. The fear of not being paid. Policies can be implemented to make sure a customer pays the bill just like we pay for water, electricity and other services.
A list of requirements of eligible customers can be compiled so that only capable customers can get the offer. If a customer cannot complete payment, the bank should be able to deduct some money from a customer’s other accounts.
There are many ways to implement payment plans in Uganda using a system which is favorable for both the buyer and the seller. These are a few that come to mind;
1. Banks can partner with sellers:
Partnering with banks to investigate the financial trend of an individual’s account so that only those who meet the requirements are eligible to this offer.
2. ISPs can encourage the use of mobile wallets for those without debit/credit cards:
ISPs like Airtel and MTN are in a much better position to partner with sellers and accept payments via their mobile wallet or MasterCard online payment systems. With the Airtel MasterCard, all payments can be made directly from one’s wallet to a bank account or any other online payment system owned by the seller.
3. Online payment should be subsidized:
The government of Uganda cannot encourage the use of online payment when the charges per transaction are still high. It would even be better if they were removed. At this rate, Ugandans will feel reluctant to start using the available portals.
Our future generations do not have to go through the things we are going through. Besides, why make things better in future when we can make them better now, for our generation. Let us know you think about this idea by hitting that comment button or sharing this article with your circles.
Author: Allan Bangirana
Allan Bangirana has a taste for all kinds of topics and usually writes about tech, entertainment, sports and community projects that make a difference in society.