Insto Targets Installment Loans for Large P2P Payments

instoGetting an installment loan for high-value transactions at the point of sale is nothing new. Venmoing (yes, it’s a verb now) a friend for your share of last night’s pizza is not a big deal either. But what if instead of a pizza, you need to pay someone for a car, and instead of paying it all upfront, you want to set up a payments schedule?

A San Jose-based startup bets that there is a big opportunity to use installment options in P2P transactions.

Insto, launched this morning, powers installment payments for P2P as well as B2C payments. The app breaks down big-ticket payments into installments that can be scheduled and modified by the buyer and the seller. The startup provides a guarantee of up to $3,000.

Currently, only one party – either the buyer or the seller – needs to download the app: the other party will receive a link via text or an email, with the suggested payment option, Bruce Chen, chief executive of Insto and a former eBay Taiwan executive, told Bank Innovation. Buyers and sellers can also view a calendar that shows when their next payment is scheduled. The startup charges a 3% flat fee for P2P scheduled transactions, while the charge can vary from 0.99% to 6.99%, depending on the length of the loan.

Insto launched in beta earlier this year. “We have had over 130 organic transactions, with each transaction over $1,000, totaling a quarter million,” Chen said. “The smallest transaction was worth $300, and the largest one was $43,500.”

Currently, the app supports debit and credit card payments. “In the future, we will support ACH, and other types of payments, like PayPal or Google Wallet,” Chen added. The company also looks to “gradually” bring merchant-partners to use the app’s API at the point of sale.