🛒 Installments For Retailers

Here’s a detailed breakdown of the application that enables sellers to collect payments in installments, backed by a securitized credit structure, with references to the specific company (CLIENT) anonymized.

Key Components and Actors:

• Client (Seller):
  A business utilizing the application to offer installment payment options to their buyers. The client’s risk profile and sales are securitized, allowing them to collect payments more flexibly.
• Buyer:
  The customer purchasing goods or services from the seller and choosing to pay in installments.
• Platform:
  Facilitates the installment payments process and manages the securitization of the seller’s receivables. It integrates with other components to streamline the transaction flow. Credit Rating Engine: Analyzes both the seller and the buyer to determine creditworthiness and risk levels. This engine is crucial for setting the terms of the credit structure, such as the maturity, score, and limits.
• Securitization:
  The process of pooling the seller’s receivables from installment payments and turning them into a tradeable asset that investors can purchase. This provides liquidity to the seller while securing the receivables.
• Gateway:
  The payment gateway used by the platform to process transactions, including generating payment requests (Pix) and managing collections.

Process Workflow:

• Credit Analysis and Scoring:
  The platform’s credit rating engine evaluates both the seller’s risk profile and the buyer’s creditworthiness. This step determines whether the buyer is eligible to pay in installments and what terms (such as limits and maturity periods) will be applied【45†source】. The seller’s overall risk profile is taken into consideration to establish the terms under which their receivables will be securitized.
• Quote and Approval:
  Based on the credit analysis, the platform generates a quote for the installment payment option. The quote includes the interest rate, the maturity period, and any other relevant terms. If the buyer’s profile meets the required criteria, the transaction is approved. If the buyer does not meet the criteria, the platform returns a "not available" response, and the transaction does not proceed【45†source】.
• Generating Pix and Payment Processing:
  Once the installment option is approved, the platform generates the necessary Pix payment requests. These are sent to the buyer for payment, allowing them to make the first installment or schedule future payments. The Pix payment is processed through the gateway, which handles the transaction securely and ensures that the seller receives the funds【45†source】.
• Securitization of Receivables:
  The seller’s receivables from the installment payments are pooled together and securitized. This means that the future payments expected from the buyer are converted into a tradeable asset that can be sold to investors. The securitization provides immediate liquidity to the seller while ensuring that the risk is distributed among the investors purchasing the securitized receivables.
• Collections and Monitoring:
  The platform manages the collections process, ensuring that each installment payment is received from the buyer on time. If payments are not received, the platform initiates the necessary actions to collect the funds. The collections process is closely monitored by the platform, which ensures that the funds are appropriately allocated to the securitized asset and the seller receives their share of the payments【45†source】.
• Return and Reconciliation:
  In cases where payments are not available or are delayed, the platform’s system returns a notification to the seller and adjusts the reconciliation process accordingly. This ensures that the seller and investors are kept informed about the status of the receivables and any risks associated with the payment flow【45†source】.

Risk Mitigation:

• Credit Rating Engine:
  By evaluating both the seller’s and the buyer’s credit profiles, the platform minimizes the risk of default and ensures that only qualified buyers are offered installment payment options.
• Securitization:
  The securitization of receivables spreads the risk across a pool of investors, providing security for both the seller and the platform.
• Collections Management:
  The automated collections process ensures timely payment tracking and proactive measures in case of delays, minimizing the risk of non-payment.

Summary

This installment payment application allows sellers to offer buyers the option to pay in installments while securitizing the receivables to provide liquidity. The platform handles the entire process, from credit analysis to securitization, ensuring that both the seller and the investors are protected. The credit rating engine assesses the risk profiles, the payment gateway processes transactions, and the collections system monitors and reconciles the payments, making the entire flow secure and efficient.