Shoppers consider the mechanism of its operation convenient and done without profits

Companies competing with banks in installment purchases without interest

  • The “installment” service is limited to temporary purchases, and the credit card is a great temptation for customers.

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  • Muhammad Ghazi: “Companies provide a service similar to that provided by bank credit cards, and it is done without fees.”

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Companies in the local market compete with banks to provide installment services for purchases of electronics, phones, furniture, and clothes, starting from 150 dirhams or more, without interest, with reduced fees that do not exceed 20 dirhams, and sometimes without any fees, according to what is required. It is stipulated by the agreement between the company and the shopper.

Shopping Terms

According to these companies that provide a service: “Buy now and pay later”, the shopper must create an account on the company’s smart application, agree to the terms and conditions, and study them well, to ensure that they are commensurate with his financial conditions.

These companies also require that the shopper reside in the UAE, over the age of 18, and have an email address in his name and a phone number, in addition to providing the required documents such as: Emirates ID card, salary certificate, or bank account number.

convenient way

Dealers told «Emirates Today» that they prefer to deal with these companies, given that the installment mechanism through them is convenient, and takes place without interest or profits, in addition to that the payment process takes place in three or four installments, and up to six monthly installments if the value of the purchases is large. This means that the consumer is not burdened with paying at once, and the repayment period itself is short and does not exceed six months.

Shopper Ahmed Selim said that he prefers this type of installment, rather than resorting to banks to request a loan or credit card, because of the interest and fees they charge.

Selim presented his experience, saying: “I recently bought a phone worth 3,000 dirhams, which was paid in three convenient installments, but the problem is that most companies that provide this service accept only one transaction for the shopper, and upon completion, new purchases can be made in installments.”

Advantage service

In turn, shopper Huda Ibrahim said that this service from the companies has provided her with many advantages over the past months.

She added that the service requires only an identity card and a phone number, considering that it is much better than a bank credit card, as it is without fees or interest, and includes an acknowledgment of the fulfillment of obligations on the agreed date only.

And she continued: «The advantage of this service is that it is somewhat limited to temporary purchases, in contrast to the credit card, which is a great temptation for customers, especially those who face a problem in managing their financial affairs».

price comparison

In the same context, shopper Abdullah Ali said that he shops online and settles the sums owed by him through companies if they contract with well-known and guaranteed online shopping sites, pointing out that he trusts online shopping if the company has a headquarters in the UAE.

He added that companies operating in installments have spread during the past and current years, after the success of shopping and purchasing online, during the period of the Corona virus pandemic.

He said that he advises not to install purchases by installments until after confirming all terms and conditions, and the price, calling for a comparison between the price in the case of “installments” and one-time payment.

The role of the mediator

In addition, the banking expert, Muhammad Ghazi, said that the installment companies usually play the role of “intermediary” between the shopper and the shops or sales sites, within certain conditions, pointing out that the installment process usually takes place over a period ranging between four and six months, and in some cases three months. .

He believed that companies compete with banks, as they provide a service similar to that provided by bank credit cards, but with a certain and somewhat low limit, in addition to that they are done without fees or interest because they seek to spread, and then they can impose broader conditions.

Shopper tips

And the banking expert, Sheikha Al-Ali, pointed out that there is a great development in retail trade, especially electronic commerce, noting that installment companies are a form of marketing and spreading for “online” purchase.

Al-Ali advised shoppers to read the terms and conditions before agreeing to them, to ensure that there are no fees associated with the transaction as promoted, in addition to knowing the fees for late payment, or stopping for any emergency circumstances.

She explained that the number of these companies operating in this field is not large in the UAE market, but the existing ones are registered within the country, and contracted with large shopping sites, and this feature in itself is a guarantee for the customer in their seriousness, and to ensure that there are no hidden benefits or fees.

Sheikha Al-Ali:

• "I advise shoppers to read the terms and conditions before agreeing to them, to ensure that there are no fees associated with the transaction."

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