What are split payments?

The payments industry is ever-evolving to match customers’ changing needs. A quick payment experience isn’t enough anymore: customers want a more tailored journey, using their preferred payment methods in whichever way is more convenient. Split payments are part of this constant industry transformation. This article guides you through all you need to know about split payments, including their use cases, benefits, and business implications.

What is a split payment?

A split payment is a transaction involving paying for one purchase using more than one payment method, which could be additional credit or debit cards or even vouchers. Split payments can be made by a single user who chooses to pay using various methods or by more users who are splitting a bill for a product they bought together. Most banks offer this functionality to their customers by enabling them to request money from whoever they split the bill with (also called sub-payees).

Split payments can be used both by individuals and companies. For individuals, split payments may be helpful to pay, for instance, for a shared restaurant or household bill. For businesses, split payments are helpful when dealing with multiple vendors, sellers, or merchants. Brick-and-mortar shops are more likely to offer this functionality, as online shops have been slower in adopting it. However, most global e-commerce shops already enable users to use, for instance, use their gift card balance to pay for part of their purchase, along with their debit card to pay for the remaining costs.

Types of split payments

It is possible to split payments across various payment methods, subject to the company’s offerings. Some of these payment methods include:

  • Credit or debit card
  • Cash
  • Gift card
  • Reward cards
  • Store credit card
  • Checks
Insurers must be able to offer a wide variety of payment methods.

Split payments vs. deferred payments

Deferred payments can be split into a set number of installments, paid for throughout a specific period. Rather than a one-off, full payment, customers divide the costs of a purchase into separate installments that they can pay at a later date, usually with no interest added. The most popular form of deferred payments is Buy Now Pay Later, or BNPL made common through solutions like Klarna, which was adopted by major retailers worldwide. BNPL is a type of split payment that, rather than being processed in full at the time of purchase and simply using different payment methods, is divided into smaller payments processed on other occasions.

Usages of split payments

There are various use cases for split payments, some more popular than others. Let’s look at three relevant use cases below:

E-commerce sector

Global marketplaces such as Amazon offer products from thousands of sellers across the globe. When customers purchase items from different sellers in one order, the payments must be divided by each seller’s product so that all sellers get the correct amounts on time. Split payments make this possible, enabling easier cash flow management and simplifying the settlement of payments into various accounts.

Education and Ed-tech sector

Schools and other educational organisations may charge different fees for courses, access to resources, sports, etc., and they may want to have these fees allocated to various departments. Split payments enable them to distribute the correct amounts to each department with minimal manual efforts. In the case of ed-tech, online educational platforms like Coursera need to transfer the right parts from the students to each tutor, which is also made possible through split payments.


Aggregators like Uber need to collect payments from various customers and pay each Uber driver accurately and timely. Split payments enable them to gather all the gains from different customers into a single payment to the driver.  

Benefits of split payments

Generally, providing customers with a wide range of payment options means that companies can cater to each customer’s payment needs and preferences. For instance, while most customers may choose to pay with a debit card, others may use PayPal as their first choice to pay for services online. Split payments enable customers to pay however they want to pay, resulting in a much higher conversion rate, more sales, and more revenue for the businesses. In sum, split payments enable companies to:

  • Increase conversion rates
  • Reduce checkout friction and checkout abandonment
  • Deliver a better customer payment experience
  • Boost customer satisfaction and customer loyalty
  • Potential increase of order value due to higher payment flexibility

Split payments challenges for businesses

While split payments greatly benefit customers and businesses, enabling this functionality isn’t a straightforward process. Here are some implications you may want to keep in mind if you are considering providing your customers with split payments options:

  • Technical integrations– Offering split payments means that you need to provide a range of payment options to start with. For instance, you need to accept a range of card networks, digital wallets, bank transfers, or vouchers. A single payment provider won’t cater to all these options, so you must integrate with multiple providers. Integrations with providers are costly, lengthy, and resource-draining. Thankfully, solutions like Imburse can help.
  • Card verification- If customers use two different cards to purchase a service or product, both cards need to be verified, and the billing address needs to be matched with the card issuers. However, most often than not, providers will do the verification process for you.
  • Refunds- Refunds are slightly more complex when they involve more than one payment method, as the payment needs to be refunded to the same payment methods used in the purchase. Split payment refunds may require further communication with the support/customer service team.  

About Imburse

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using various payment technologies and providers around the globe.

In a world where consumers’ payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or needs, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.

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