Banks and retailers warm up to instalments

One month after having introduced payment in instalments via credit cards through retailers, Raiffeisen Bank says it is overwhelmed by demand from trade and services companies, which want access to this way of boosting sales, despite the fees they have to pay to the bank.

For the time being, the programme is only available to medium and large companies which are already clients of the bank in terms of card acceptance and have Raiffeisen-supplied POS-es installed. For these companies, the programme offering payment in instalments with no interest charged comes as a benefit.

Mihai Negulescu, manager of Raiffeisen's card acceptance department, says the bank entered this market segment, which had previously counted only Credit Europe and GE Garanti Bank as competitors, for "economic environment reasons."

He believes such a facility can become the "product of the year" given the continuing recession, as salary cuts trigger declines in retail sales.