Decide first whether you carry the plan or a lender does. If you carry it, set the terms (a deposit, the number of payments, how often and a final date), put them in a written agreement the customer signs, save a card or bank account with their authorization to charge it, and collect each payment automatically. Then decide how you'll handle card fees and a missed payment before the first plan starts. A plan payable in more than four installments can bring federal Truth in Lending rules into play, so check that before you launch.
Checked against the Code of Federal Regulations, Stripe's documentation and pricing, and the CFPB on 9 October 2026.
Should you run the plan yourself or use a lender?
That's the first decision, because it settles who the customer pays and who carries the risk.
- Your own plan. The customer agrees the schedule with you and pays you. You decide who can have a plan and on what terms, and you carry the risk that a payment doesn't arrive.
- A lender or buy now, pay later provider. The customer takes a loan from the provider and repays the provider. The CFPB describes buy now, pay later as letting a consumer buy a product and "pay back the loan over four installments", the first usually a down payment. (CFPB: buy now, pay later study)
- What the lender costs you. Businesses pay the provider a fee on each sale. In the CFPB's 2022 study of five large buy now, pay later lenders, those merchant fees came to 2.49% of the purchase volume they financed in 2021. (CFPB report, September 2022)
A plan of your own fits when the price is high, the customer pays over months rather than weeks, and you want the relationship to stay with you. A 0% plan from the school, or a loan from a lender? works through what each costs the customer, with a school as the example.
What terms do you need to set?
Write these down before the first customer asks:
- Deposit. A fixed amount or a percentage of the price, taken when the customer signs.
- Number of payments, or a final date. A final date stops a long plan running past the end of what you're selling.
- Frequency. Weekly, every two weeks, monthly or something else. Match it to how your customers are paid.
- First payment date. How soon after signing the schedule starts.
- Rounding. When the balance doesn't divide evenly, decide which payment absorbs the cents. The last one is the usual choice.
- Who qualifies. Which products or services can be paid over time, and whether the rules differ for each.
Take a $6,000 sale with a $600 deposit. The $5,400 balance is nine monthly payments of $600, or eighteen payments of $300 every two weeks. Same total, different rhythm. Weekly, every two weeks or monthly? covers how to choose.
Does offering payment plans make you a lender?
It can, even at 0%. Under the federal Truth in Lending rules (Regulation Z), a creditor includes a business that regularly extends consumer credit "payable by written agreement in more than four installments (not including a down payment)", or with a finance charge. "Regularly" means more than 25 times in the preceding calendar year, or more than 5 for credit secured by a home. (12 CFR 1026.2(a)(17))
So a business selling to consumers that offers a deposit and more than four payments, many times a year, should check what Truth in Lending asks of it before launch. Is a 0% payment plan a loan? goes through the details and the questions to take to your attorney.
How do you collect each payment automatically?
Save the customer's card or bank account when they sign, with their permission to charge it on the schedule, and charge each payment on its date.
For a consumer's bank account or debit card, federal rules set the paperwork. Recurring transfers "may be authorized only by a writing signed or similarly authenticated by the consumer", and you have to give the customer a copy. If a payment will differ from the one before it, the customer gets written notice of the amount and date at least 10 days ahead. (12 CFR 1005.10) That second rule matters when you change a plan midway; Changing a payment plan after it starts covers it.
Sending an invoice for each payment works for a short plan. Over a year of monthly payments, that's twelve invoices the customer has to act on.
What about card fees?
Every card payment on the plan carries a processing fee, so a long plan adds up. Two common answers:
- Offer bank transfer beside card. On Stripe's standard US pricing, a domestic card payment costs 2.9% + 30¢ and an ACH Direct Debit 0.8%, capped at $5. (Stripe pricing) What does ACH save on a $15,000 plan? runs the numbers.
- Add a card surcharge where your state allows it. Stripe's surcharging documentation lists the US as credit cards only, up to 3%. It requires you to disclose the surcharge before purchase, show it separately on the receipt and let the customer choose a different payment method, and it leaves state rules to you. (Stripe: collect surcharges)
Decide this before the first plan, because the fee belongs in the terms the customer agrees to.
What happens when a payment is missed?
Plan the answer before it happens:
- Reminders. An email before each due date tells the customer the charge is coming.
- Who is told. Someone on your team should hear about a failed payment the day it fails, not at month end.
- Another way to pay. A customer whose card declines may be able to pay by bank transfer instead.
- When to change the schedule. Decide who can move a date, split a payment or recalculate the rest, and what the customer is told when you do.
Where should the plan live?
Start the plan where the sale happens, so nobody re-keys the terms.
- From a deal in your CRM, if a rep closes the sale. The deal already carries the price and the customer. Take a deposit and schedule the balance from a HubSpot deal shows the setup, and there's a Pipedrive version.
- On your website, if customers buy without a rep. A payment plan builder on your own website covers letting customers choose inside your rules.
- In the right account. If you run more than one location, each payment should land in that location's bank account and books. One LLC per location, or one for all? covers the structure.
What should you test before launch?
- A plan at your smallest deposit and your longest schedule.
- A plan where the balance doesn't divide evenly, to check the last payment.
- A declined card on the first scheduled payment, and who hears about it.
- What the customer receives by email, and when.
- That each payment shows up against the right customer, and in the right location's books.
Changelog
- 9 October 2026: first published.
Payment plans built from the deal in HubSpot or Pipedrive, with each location paid into its own account and books.
Paycove runs plans you own, built from the deal in your CRM, charged on the dates you set and paid into each location's own account.
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