The emerging of online installment service and P2P second-hand platforms stimulate consumers’ willingness to consume. This paper is intended to explore pricing optimization when a retailer provides installment service in competition with P2P market. We first explore a retailer’s optimal decision to set the selling price and service fee for installment in a benchmark scenario without P2P platforms. Then, we investigate how a P2P market enforces retailer to adjust its pricing decisions. We find that offering installment payment increases both the retailer’s selling price and profit unless under a remarkably high wholesale cost or default rate. We also find that a retailer needs to charge a higher selling price while a lower service fee for installments when confronting rivalry from a P2P market. Perhaps counter intuitively, our analysis further shows that the retailer is able to eliminate the P2P market when consumers have a high valuation towards second-hand products.