6 Key Factors to Select a Consumer Financing Platform for 2025

As consumer demand for financing at the point of sale continues to grow, leading merchants prioritize meeting this demand. To achieve this, they are moving away from a single lender model towards a platform-first approach to provide customers with access to multiple lending options through a seamless and flexible purchasing experience. 

Choosing the right point-of-sale (POS) financing platform is essential as it goes beyond simply processing transactions to play a pivotal role in shaping the customer journey. Offering multiple financing choices empowers customers with financial flexibility and enhances their purchasing power, especially for high-ticket items that might otherwise be out of reach. Consequently, your POS financing platform is a strategic tool to increase approval rates and generate higher sales, while fostering customer loyalty. 

6 crucial factors when choosing the best POS financing platform

1. Omnichannel experience
2. A broad network of lenders
3. Waterfall finance capabilities
4. Easy integration and management
5. Comprehensive analytics and data 
6. White-label capabilities

1. Omnichannel experience

Customers are accustomed to increasingly seamless and personalized shopping experiences. An omnichannel lending approach that covers in-store financing, eCommerce or any other point of sale financing allows customers to access financing solutions wherever they interact with your brand.  Your platform should be embedded at every point of sale be it in-store, online, via a call center, door-to-door, or any other checkout to provide a seamless omnichannel experience.

2. A broad network of lenders

The ideal embedded lending financing platform includes a broad network of lenders. This way your financing offer can cover the entire credit spectrum, and offer diverse financing products, serving B2B and B2C customers and different geographies. A lending network positions you to meet the financing needs of all of your customers, and support them as their needs change. 

The more comprehensive your lender network, the more you are safeguarded against changes made by single lenders. A lender adjusting their credit box, merchant discount rates, or even ceasing operations can leave you and your customers without an alternative. It also puts you in a stronger position to negotiate terms with lenders who are vying for your customer’s business.

3. Waterfall finance capabilities

Waterfall finance technology connects shoppers to multiple lenders according to tier, starting with prime lenders. If an applicant meets the criteria for prime lending, they are approved at that level. If not, the process moves them to near-prime lenders. Finally, if eligibility is still unmet, the applicant is referred to subprime lenders or lease-to-own financing options. Platforms like ChargeAfter streamline this process, leveraging a multi-lender network to enable merchants to deliver personalized financing choices for shoppers in a single application in real-time.

4. Easy integration and management

Integrating a POS platform into every point of sale should be fast and seamless with in-store, eCommerce, in-clinic, in-home, and call center capabilities. Look for a platform that enables quick integration into all major eCommerce platforms, API and SDK kits to personalize and build the online checkout experience, and flexible in-store options.

For example, in-store financing can involve scanning a QR code, using an in-store device at checkout, self-checkout, or sending a customer a link to their device. For e-commerce financing, a platform should be able to support pre-approval applications that can be combined with an in-store visit. By accommodating customers wherever they make their purchases, you make it easier for them to complete their transactions.

For merchants, an embedded lending platform should offer effective post-sales management, including dispute resolution, refunds, and reconciliations. Real-time updates on performance, volume, and order information are essential to optimize lending programs. Direct communication with lenders and tools to track, process, and resolve cases should be standard features of your chosen platform.

5. Comprehensive analytics and data

A superior embedded lending platform will provide actionable analytics and data. A complete view of lending data makes optimizing financing offerings and adapting to shifting market trends possible. With this data at your fingertips, you can plan marketing and retargeting campaigns that build strong customer relationships, enhancing their lifetime and average order value. 

Analytics from your platform should also help you to understand and optimize your customers’ journey, showing you where and when customers drop out and where and when they convert, so that you can easily optimize your lending program within your customers’ journeys and improve your eCommerce website performance. 

6. White label capabilities

A white-label POS system allows you to customize the platform to match your brand identity, increasing customer recognition and loyalty, ensuring a seamless and integrated brand experience across all customer touchpoints.

POS financing: A snapshot of 2023

POS financing trends in 2023 confirm that embedded lending at the point of sale is here to stay. The 2023 holiday season, the busiest time of year for purchasing, saw a 14% increase in payments using BNPL (Buy Now, Pay Later) compared to the previous year, according to Adobe Analytics data. This trend is backed up by research conducted by Citi Retail Services that showed that 90% of customers want merchants to offer a choice of payment options at the point of sale. 

This shift in consumer behavior underscores why the right POS financing platform is crucial for merchants aiming to thrive in today’s competitive landscape.

A snapshot of 2024

A recent ChargeAfter survey found that in 2024 almost half (45%) of retailers reported approval rates below 60%. This is a significant increase from 2023, when only 29% of retailers reported under 60% approvals.
The average approval rate for POS financing applications has dropped from 65% in 2023 to 58% in 2024, leaving over 40% of customers declined at their moment of need, representing a significant potential loss in sales
Whereas last year 12% of merchants achieved at least 80% approvals, this has declined to a mere 2%.
The decline in approval rates is indicative of lenders’ increasing risk aversion amid economic uncertainty. This trend highlights the need for merchants to diversify their POS financing.

Conclusion

Choosing a POS financing platform can be complex, given the broad range of features to consider and the multitude of providers in the market. However, by keeping these five critical factors in mind—omnichannel experience, vast lender network, easy integration and management, comprehensive financing analytics, and white-label capabilities—you’re well on your way to selecting a platform that meets your business needs and enhances your customers’ shopping experience.

About Jeffrey Tower
EVP Global Business Development and Strategy
Jeff has over 20 years of experience driving revenue through building global brand awareness, business development, marketing, and sales departments focused on consumer financing, fintech, and eCommerce.