Installment Payments
Installment payments refer to a financial arrangement where a large sum, such as a purchase price or loan, is divided into smaller, periodic payments (installments) over a set period, typically with interest or fees. This concept is widely used in e-commerce, lending, and subscription services to make products or services more affordable by spreading costs over time. It enables businesses to offer flexible payment options and helps consumers manage cash flow without paying the full amount upfront.
Developers should learn about installment payments when building applications that involve transactions, such as e-commerce platforms, fintech apps, or subscription-based services, to implement features like 'buy now, pay later' or loan repayment schedules. Understanding this concept is crucial for integrating payment gateways, calculating interest, managing payment schedules, and ensuring compliance with financial regulations, which enhances user experience and business revenue models.