Shopping cart abandonment is a problem most retailers are faced with. According to statistics, 88.05% of online orders were abandoned in March 2020. While online purchase conversions are on the rise as a whole, there is still a large number of consumers who don’t convert, causing a significant impact on retailer’s sales. 

Exorbitant shipping fees, lack of data security, or not being able to opt-out of signing up are the main reasons shoppers drop off before completing a transaction. Not to mention sticker shock once they reach the final checkout page. The consumers of today have higher expectations for retailers and failing to meet their needs could result in a lot more financial damage to your business. In order to avoid disappointing your shoppers and getting them to convert on your store, you must address the issues that are causing the cart abandonment rates in the first place.  

Here are a few ways to get started: 

Be More Transparent About Shipping Costs

There is nothing worse than hidden shipping fees. Think about it from a shopper’s perspective. A shopper may see a $40 item and add it to the cart because it is affordable, however, once the cart updates the extra taxes and shipping fees, the $40 item quickly becomes a $65 purchase, which may be well out of their current budget. This will more than likely cause the shopper to exit the cart and leave your store. 

In some cases, companies eliminate the shipping costs altogether, however, if you are unable to absorb the cost, bundling the total cost of the product and shipping may be a better tactic. This way the consumer knows the total cost upfront without any surprises in the cart. Another way to help close the sale is to offer free shipping when they purchase a certain amount. For example, offer free shipping overall orders of $200.

If you are unable to lower the shipping costs, then be upfront and completely transparent about the shipping costs on the product page and not the cart page.  

Offer More Payment Options And Deals

Customers are becoming more aware of their finances and have also become more price-sensitive to the things they want or need. And let’s face it, there is a lot of competition in the retailer space which means that customers are able to compare prices and do more research to get the best deal for the goods they want. While being transparent about all costs may help, it doesn’t necessarily mean that shoppers won’t abandon their carts. Some customers may even add the products they want to the cart and only return at a later stage once they have the money to complete the transaction. When this happens, giving your shoppers an extra push can help persuade them to seal the deal. This can be done using remarketing, reminder emails, or offering them coupons for their next purchase. 

Another effective way to get the sale you want is to offer your shoppers Buy Now, Pay Later solutions from ChargeAfter. Giving your shoppers the choice to purchase their goods without having to pay the full amount upfront or put it on their credit cards goes a long way in putting the buying power back into the hands of your customers. 

Bump Up The User Experience  

Creating a seamless user experience should be the top priority for any retail or eCommerce store. Shoppers don’t want to have to click on multiple tabs to get the information or products they are looking for. They want an easy and quick way to purchase the goods they want. And the same goes for applying for Buy Now, Pay Later payback plans. The application and approval should take a few minutes to complete. Another factor most customers look at is credibility and security. Payment scams is a reality that floods the internet and anything that triggers a shopper’s suspicion will lead to them abandoning the cart and your site immediately. This can be triggered by outdated layout, lack of information, or unsecure payment methods. To prevent these problems from arising, it is important to address these issues by investing in the design of your website and partnering with reputable payment gateways and Point of Sale Financing partners. 

Being more transparent with costs, offering more payment incentives like Buy Now, Pay Later, and improving payment security goes a long way in building credibility and trust with your audience. Addressing these issues will also help drive overall sales and increase average order values (AOV), meaning that you will be able to scale your business and reach your financial milestones with ease. 

This year we have seen eCommerce grow by leaps and bounds and many businesses have moved to sell their goods online in order to meet the necessary demands of the 2020 shopper. It’s no secret that this year has had a significant impact on eCommerce and consumer buying habits, however, in this ever-changing industry, it is important to stay ahead of the digital trends in order to stay ahead of the competition. Market experts predict that by 2022 eCommerce revenue will increase from $3.5 trillion to a staggering $6.54 trillion, which goes to show just how many businesses are following suit in the world of online shopping.

To help give your business a head start for the new year head, here are a few digital trends to look out for:

Voice Assisted Shopping

According to research, 75% of households in the U.S will have a smart speaker such as the Amazon Echo or Google Home. This demand is also expected to drive voice-assisted commerce sales to around $40 billion by 2022! The convenience of this technology will soon become an effective tool in growing traffic organically to your online store. Using targeted content, you are able to engage with consumers and provide them with valuable solutions to their questions, which ultimately encourages them to convert on your eCommerce platform down the line. For example, a user who is looking for a solution on how to eliminate back pain will be directed to your informative blog that provides tips to help ease back pain, this will then lead them to your innovative muscle relief gel products.

By optimizing your content with voice search in mind, adding new skills on the assistant devices, and implementing voice assistant navigation on your platform, you are able to harness the full capabilities of this growing trend.

Point Of Sale Consumer Financing

Over the past few years Buy Now, Pay Later has become an increasingly popular payment option for many consumers looking to maximize their financial flexibility. In 2021, more retailers are expected to adopt this payment method and as a result, may become the preferred way to purchase goods and services for many consumers.

There are a plethora of benefits to implementing this payment model for both the retailer and consumer alike. Online shoppers are able to split their payments over a few weeks or months depending on their budget while the retailer gets the total amount upfront without taking on the risk or admin of the payback plan.

For store owners, implementing a Buy Now, Pay Later model from renowned partners like ChargeAfter also works as an effective marketing tool to help capture your market and convert more sales. Giving consumers an affordable way to purchase your goods helps increase overall basket size and reduces cart abandonment rates.

Sustainability

There is a growing amount of pressure on companies to put more focus on their social responsibilities and this is a trend that will continue to rise in the future. According to research, 87% of consumers are more likely to purchase goods from companies that offer environmental and social benefits and 88% of consumers remain loyal to businesses that support environmental and social programs.

Omnichannel Retail

Shoppers enjoy a seamless and convenient shopping experience across all platforms. In a response to a recent survey, 73% of shoppers said that they use a multitude of channels to purchase their goods. With the increasing popularity of voice-assisted and mobile devices, omnichannel consumers are likely to increase in 2021. In order to stay ahead of this trend and provide customers with an enjoyable shopping experience, here are a few things to keep in mind going into the new year:

• Ensure your website is optimized for mobile.
• Create a personalized experience for the customer.
• Offer more payment options including Buy Now, Pay Later, purchase online and in-store collection, purchase in-store with options to deliver to your home.

The Bottom Line

With eCommerce expected to see significant growth in the coming years, businesses looking to capture the market should adopt these trends in order to stay ahead of the digital era. Implementing Buy Now, Pay Later, omnichannel shopping, and voice-assisted commerce will help maximize your sales and marketing potential. In addition to that, turning your focus towards sustainability and social awareness will also help build trust in your brand and capture the loyalty of your target audience.

Do you remember what it was like to shop pre-pandemic? Getting to touch all the merchandise at will, standing in crowded aisles, taking your own time to browse without tugging at your mask. These are all things that have become a distant memory.

It is fair to say that 2020 has been one of the most challenging years of our time and the months of lockdown has forced us to not only live differently but to buy differently.

The global pandemic has forced us to adapt to what seems to be a “new normal” and changed shopping as we know it.

While COVID-19 cases are still soaring across the globe, uncertainty still persists. Lockdown and social distancing are still very much a part of our everyday lives, which also means that eCommerce is soaring and industries are embracing the new digital future in order to adapt and survive. As a result of this, consumer buying habits have also changed. 

If you haven’t already looked into the current trends, these are some of the ways that COVID-19 has impacted consumer buying habits.

Buying Essentials Only

Before COVID-19 and the economic decline, most consumers wouldn’t think twice about maxing out credit cards on luxuries like cosmetics and clothes. Since job and financial stability have become very uncertain during these times, consumer priorities have become more aware of their spending habits and are more focused on purchasing essential foods they need rather than the luxuries they want. Groceries and household supplies have become top of the list for most consumers in these difficult times.

Customer Loyalty Is Shifting

With so many people being laid off from their jobs due to the pandemic, customer loyalty has also shifted. This has a lot to do with the value for money consumers are getting. The rapid losses in jobs mean that consumers may not be able to stay loyal to a brand they love. Value for money, convenience, and availability are taking precedence over loyalty. This isn’t necessarily by choice, but consumers are re-evaluating their spending habits and becoming more aware of what or who their money goes to.

eCommerce Is thriving

Online shopping was already a growing consumer trend, however, the pandemic has highlighted just how important it is to access products and services digitally. eCommerce now accounts for around 16.1% of all sales in the US, which is a trend that is likely to stay even after retailers reopen their doors. In fact, some retailers have officially closed their doors for good as online shopping has presented consumers with many conveniences and cheaper alternatives.

Point Of Sale Consumer Financing

Point Of Sale financing (POS), also known as ‘buy now, pay later’ was already a popular trend before the pandemic hit. 

According to research, customers prefer POS financing even if they can afford to pay full price upfront and this has become more prevalent in the past few months. Even though a shopper can afford to pay in full for the goods they want, with the financial uncertainty looming, financing the goods with buy now, pay later solutions gives shoppers more flexibility when it comes to their budgets, especially in the event of unexpected situations that may arise.

Should You Offer Point Of Sale Financing? 

Consumer financing has opened the doors for more opportunities for merchants and consumers alike. By offering consumer finance from renowned partners like ChargeAfter, you are able to relieve financial burdens for the consumer and bring more traffic to your store. So, it’s a win-win situation.

Here are a few more reasons why consumer financing benefits your business:

Customer service – Pandemic or not, consumers prefer companies that provide excellent customer service. Consumers like to be heard, and if you can listen to them, they will likely stick with your brand for a long time.

Chance to upsell – When you provide customers with a financing option, you have the chance to offer more of your products without burning a hole in their pockets. 

Immediate payments – One major benefit is that payments are made immediately once the application has been approved. Not only that, but your customer can apply for the loan without ever leaving your store and you don’t need to deal with the admin of collecting payments, allowing you more time to focus on your business.

While the pandemic may have brought on a whole lot of uncertainty, one thing is for certain, online shopping is here to stay. Understanding the shift in consumer habits is essential if you want your business to thrive. Consumers are much more aware of what they are buying. While the focus may initially be on essential goods at the moment, that doesn’t mean they are going to abandon other purchases completely. That’s why you need to be ready. Understand and meet their demands, offer POS Consumer financing, and give them more choice when it comes to their financial wellbeing. 

Christmas is notoriously expensive. According to research, the average person living in the US spent roughly $1000 in 2019 on gifts alone. And that does not include travel expenses, food, or the other frills and extras like a tree and decorations. Even though some believe they are buying smaller, cheaper gifts, in the end, it still adds up.  

Christmas has always been a time of giving, and that tradition won’t be going away anytime soon and while it is nice to spread the love by spoiling loved ones, it is easy to fall into the countless marketing traps set up by credit lending conglomerates. The deals up for offer may sound tantalizing, but once the new year rolls in and the bills start to arrive, it may have you wishing that you reconsider your decision to sign up in the first place. 

Credit applications surge over the festive season and some are unable to get out of the vicious cycle of debt throughout the new year only to be sucked back into it once the holidays roll around again. And with the economic spiral we are facing due to the COVID19 pandemic, funds are tighter for most. Not to mention that job stability has gone out the window. 

Unfortunately, this is a common trend that repeats itself every year, and considering the global circumstances, the outlook may be bleaker in the future. The good news is that there are ways to enjoy the festive season and still spoil your loved ones without putting yourself in an enormous amount of credit card debt. 

Take Advantage Of Buy Now Pay Later Options

Credit houses are notorious for offering lower interest rates during the festive season to rope in more applicants, however, it is usually only for a limited time. These “discounted” fees are accounted for in other ways such as admin fees, high APR’s, or higher interest rates once the initial period is over. There is always a catch and unexpected bill in the mailbox. 

Luckily there are other ways to get the Christmas goods you want without falling into these marketing ploys such as Buy Now, Pay Later. 

Buy Now, Pay Later (BNPL), or Point Of Sale financing offers consumers a more affordable and transparent way of lending. This model allows you to purchase what you want and pay it back without any hidden fees. POS financing partners like ChargeAfter also offer 0% APR, giving you more freedom when it comes to your finances. The total monthly payback plan is presented to you before you approve the transaction, meaning that you will always know what to expect when the bill comes every month. 

Save More Time With Buy Now Pay Later

Time is also of the essence when shopping for your loved ones and applying for a credit card can take up those precious moments you could be spending with the family instead. The application forms are lengthy and when it comes to the credit checks, you may not fit the criteria, meaning that all the time and effort you spent on the application may have just been a waste of time. Buy Now, Pay Later financing solutions have the upper hand in these circumstances. When shopping, all you have to do is select the Point Of Sale financing option and fill in a few details about yourself. The application is processed instantaneously and should you match the required criteria, you are notified without ever leaving the checkout page. This is done in a matter of minutes!

Get The Goods You Want

Now for the best benefit of all, the approval. Unlike most lenders, there is more flexibility when it comes to BNPL. When it comes to prime lenders as is the case with credit cards, the final decision is based on your credit history, current debts, and monthly income. Unfortunately, most shoppers are turned away because they don’t earn enough to meet the requirements. However, with Buy Now, Pay Later from ChargeAfter, your application is matched with lenders who are better suited for your financial needs. Should your application fail to meet the criteria of a prime lender, your data is then verified against a network of near-prime lenders for a “second look”. If you don’t meet the criteria for near-prime lenders, your data is then shared with sub-prime lenders for approval. By having this diverse network of lenders at your disposal, you have a higher chance of being approved for the loan you need without leaving the cart or checkout counter empty-handed.

Thanks to Point Of Sale Financing, Christmas shopping has become more affordable and simpler! 

As Point of Sale consumer financing has started to gain significant popularity across the globe, there are still concerns consumers have regarding this payment model. And these concerns are rightly justified given the current financial impact COVID 19 has had on the economy. 

For many, there is an unwavering fear about getting sucked into a vicious cycle of debt. Consumers are tired of getting their fingers burnt by lenders and some are still trying to pay off hefty loans that come at an extraordinarily high interest rate.  Since Buy Now, Pay Later is a relatively new loan model on the market, there are a lot of missing pieces of information that have sparked some misconceptions around the way this financing works. To put your mind at ease, here are a few facts that debunk the myths around using Buy Now, Pay Later solutions:

Myth: Consumers Are Charged Exorbitant Fees And Fines When Opting For POS Financing

False. It’s easy to see why shoppers are wary about hidden costs, however, the Buy Now, Pay Later finance model does not work in the same way that a credit card does. You do not get any unexpected bills and amounts in the post. ChargeAfter’s consumer financing services provide shoppers with a transparent and detailed breakdown of the payment plan before you check out. There are no sign-up fees or ongoing fees once the full payback plan has been settled.

Myth: POS Financing Affects Your Credit Score

True and False. It all depends on your debt habits. If you keep up with monthly payments or are able to settle the entire installment amount before the agreed payment period expires, then it won’t have any negative impact on your personal credit score. However, if you default on monthly payments or are unable to fulfill your end of the agreement in the predetermined period of time, then it can have a negative effect on your credit score, as is the case with any type of credit or loan model.

If you have a healthy financial mindset in terms of paying back debts, then you can rest assured knowing that your credit score will be intact when using ChargeAfter’s POS financing options.

Myth: Applying For Buy Now Pay Later Is A Lengthy Process

False. There is no denying that the biggest downfall of applying for credit is the amount of time it takes. Not to mention the fact that every aspect of your financial past is scrutinized with a fine-tooth comb. However, Applying for Buy Now, Pay Later is a simple process that takes a few minutes to complete. Once you have selected the POS financing option on check out, your details are matched against a large network of lenders. If your application meets the criteria in this network, the loan is approved immediately. There is no need to visit a bank or fill out mountains of paperwork. The application is completed without ever leaving the counter or checkout page. 

Myth: You Need A New Credit Card When Applying For Point Of Sale Financing Plans

False. You do not need to sign up for a new credit card or any other type of store card when applying for Buy Now, Pay Later solutions. As we mentioned before, all that is required is a few simple pieces of information during check out. You are also able to choose whether you want the monthly payments to be charged to your existing debit or credit cards. 

When done responsibly, using Buy Now Pay Later options from ChargeAfter is a seamless and affordable way to get the goods you want without breaking the bank or getting yourself into mountains of debt.

Benefits Of Lending To Consumers Through Point Of Sale Financing

The world as we know it has changed and in these difficult financial times, people are becoming more aware of how and when their hard-earned money is spent. We live in an era where credit is king simply because prices have skyrocketed and interest rates are through the roof, yet wages remain the same. For those fortunate few, paying for high ticket items such as furniture is still possible, but for the rest, it simply does not fit into the budget. And for those who do have some form of credit available for these items, the fees and interest rates are unjustifiably high, putting them out of pocket and unsure of the next bill amount in the mail. 

This is a very real situation that many of us face and more customers are looking for flexible payment options that are transparent, easy to apply for, and offer more bang for their buck. This is where the importance of Point of Sale financing options comes into play.

Point Of Sale consumer financing, or buy now, pay later is a form of credit that is offered on check out. When customers choose this option, they are asked to fill out a quick application for a small loan. Their data is vetted against various lenders and should they meet the criteria, they are instantly approved for the loan. These microloans are broken down into affordable monthly payments without any hidden fees, so the customer always knows how much they are in for before accepting the terms. But it’s not just the customer who benefits from this online financing, you as the merchant also stand to gain when offering this line of credit.

Here are some of the benefits you as the merchant can enjoy with Point Of Sale financing from ChargeAfter:

New Customers

Even if you have a strong marketing campaign and have invested in an SEO strategy, if customers can’t afford your product, there is simply no way they can close the sale without credit options. Offering one line of credit in the form of in house or bank cards is just not cutting it anymore. Many consumers, especially millennials are hesitant to use credit cards because of the debt and costs associated with them. Instead, more are turning to buy, now pay options. 

Providing consumers with an easy way to assess credit without exorbitant fees will help your marketing efforts by driving more customers to your store. 

More Sales

The average cart abandonment rate across all industries is almost 70%, which means that approximately seven out of ten customers will not complete a transaction. There are many factors behind abandoned carts, however, the most prominent is the limited number of financing options available to shoppers. The solution to this issue is to eliminate certain pain points during the checkout and ensure a smooth experience. Shopping cart financing options like buy now, pay later allow customers to pay a small amount upfront and settle the rest with affordable monthly payments. 

By offering customers this option they are not as price-sensitive as they would be when they have to fork out the entire amount upfront. This also helps to increase the average order value as shoppers are more likely to go for the more expensive option for just a few more dollars per month. More transactions of a higher value means more profit for your business.

Fewer Risks

Investing in in house store credit is a capital intensive exercise that carries a lot of risks. By offering consumer financing like buy now, pay later, the risk of late payments or no payments doesn’t fall entirely on your shoulders as the merchant. Instead, you are allowing your customers to connect directly to lenders who provide the loan. This means that you do not need to worry about the terms of their agreement or take on all the risk in the event that a customer does not hold up their end of the bargain. 

By partnering with a reputable Point Of Sale financing like ChargeAfter you are able to grow your business, customer base, and sales without the hassles that come with traditional forms of credit! 

The way we do things is changing at a mind-boggling pace. Technology has become such a pivotal part of our lives, it is hard to remember life without it. While some businesses are still catching up to the digital age, most have dedicated most of their focus to winning over customers online by changing business models, moving transactions online, and incorporating new conversion strategies to meet the needs of the modern-day shopper. 

As retailers shift their goals and tactics to satisfy the instant personalized experience shoppers have come to expect, here are a few trends to jump on in the coming year.

Improvements Customers Are Looking For

Before we dive into the trends, here are a few improvements customers are looking for when dealing with retailers in general.

• 63% of customers have stated that they want up to date and transparent information on websites.
• Roughly 93% of customers do not convert on eCommerce sites and the main factor behind this is shipping costs and product price.
• 88% of customers state that their buying decisions are based on speed and cost of shipping.
• 86% of shoppers want to purchase on the channel of their choice when shopping.
• Shoppers want more options from inventory, delivery, and payment.

These are just a few things shoppers are looking for and what your business should take into consideration going forward. While your store isn’t being solely judged on the services or goods you offer, the entire user experience is where most of these concerns stem from.

However, implementing a few of the tips below can help address some of these concerns and influence a buyer’s decision in a positive way.

More Flexibility 

As we mentioned before, customers are looking for more options and flexibility when it comes to shipping and payment methods. While credit cards and digital wallets are commonly found across the board, they are not a one size fits all solution for everyone. Credit cards add to the influx of debt most consumers are already trying to wrangle and not everyone has the luxury of qualifying for one in the first place. Digital wallets are convenient for online payments, however, this does not really meet the needs of consumers who do not have the total amount of funds available when checking out on your platform. 

Consumers are looking for more financing options that give them the flexibility to pay off the purchase without high interest or APR‘s in order to maintain their financial well being and responsibilities to other debts. This is the reason why buy now pay later, or also known as Point of Sale financing is gaining a fortune of traction in the eCommerce space. 

Offering Point of sale financing on checkout is a selling point that enables customers to purchase high-quality goods that are normally expensive without laying out the full amount upfront. And with partners like ChargeAfter, payment plans do not come with the hefty APR increases. 

In addition to flexibility, buy now, pay later solutions offer consumers more transparency when purchasing. They know exactly what they are in for without hidden charges before they have finalized the deal. 

More Authenticity

Gone are the days where aspirational marketing once ruled. While these strategies may work for some companies, consumers prefer to see real people. The focus on celebrities or the ultra-slim does not appeal to the majority of consumers today. Instead, shoppers are connecting more with everyday individuals who don’t fit the mold that the media loves to portray. Body positivity, more inclusion, and more diversity are more valuable in connecting with your audience. According to a survey, 63% of Gen z’s prefer to see everyday individuals as opposed to celebrities in ads. Another report highlights that brands that utilize diverse ads are more likely to convert customers than those who don’t. 

Innovation In User Experience 

User experience has always been the key to more conversions, however, consumers are looking for more innovation in the service and experience they receive from merchants and retailers. This can be achieved by loyalty programs, points, or a full-blown virtual experience with a human element. For example, capturing the attention of Gen z by giving them a virtual alternative to trying clothes on in-store by allowing them to try on or test your products virtually with augmented reality technology.  The possibilities in innovation are endless and once you give consumers a memorable experience, their loyalty to your brand will grow. 

Implementing a few of these tips will not only help satisfy the expectations of your consumers but will also help increase conversions and close more sales. 

COVID-19 has had a profound impact on consumer behavior, one that will have a lasting effect even after the pandemic passes.   As consumers continue to be limited by travel restrictions and the number of people who can be in the same building concurrently, they are increasingly shifting their spending from in-store to online.  According to research by eMarketer, online sales have increased by 450% in 2020 in some sectors, largely driven by COVID-19.  But despite this surge in online spending, some merchants are still missing out on revenue opportunities.

What’s driving these missed revenue opportunities?   It is the credit squeeze between consumers and lenders.  Consumers need more credit to support their increased online purchasing, but lenders are making it more challenging to secure credit by imposing stricter borrowing criteria.  This causes many customers to be denied the credit they need to make the purchases they want, which in turn causes merchants to miss out on valuable sales.

Consumers are Spending More Money on High Ticket Items Online

Consumers are buying higher-priced items online, and also increasing their overall order sizes.   According to eMarketer, average order values through online sales is up 36% in the first nine months of 2020.   There are two key trends driving the spending hike:

Home Offices and Schools – COVID is driving millions of consumers who are now working from home or attending school remotely to make investments in their homes to facilitate better remote working environments.  They are buying furniture and home office technology to make working from home tenable over the long term.   

Recreational Activities – The second investment consumers are making is in recreational activities.  With many facilities closed or open in limited formats, consumers are exchanging gym memberships for in-home equipment, foregoing dining out for upscale cooking appliances, and trading travel for bigger and more sophisticated home entertainment systems, and staycation items, including outdoor furniture, camping gear, bicycles and more.   

Consumers Need Affordable Financing Options

Consumers’ home investments carry relatively high price tags, often exceeding their ability to fund for them upfront, or their comfort in financing at credit card interest rates.  Additionally, younger consumers may not even have a credit card.  A recent report by Business Insider stated that more than 60% of all Millennials do not even use credit cards, relying instead on cash and debit cards, which makes it harder for them to fund large purchases all upfront.

To address these concerns, merchants are beginning to offer their customers financing at checkout. This point of sale financing allows customers to pay for larger purchases over time (typically anywhere from 6 to 48 months) at an interest rate which is much lower than those of credit cards.

Consumers like point of sale financing because it enables them to spread the cost of large ticket purchases over a period of time, rather than all at once.  A customer may not be able to spend $2,000 on an in-home spin bike but is happy to pay $50 per month over the course of 40 months. On top of that merchants often subsidize the cost of the loan, binging the interest rate down to 0% or near 0%.  This is far cheaper than the average 15% interest rate consumers incur on their credit cards.   

But Banks are Tightening Lending Requirements

Given the volatile economy, where many people are unemployed or at risk of losing their jobs,  it is not surprising that banks are making it increasingly difficult for consumers to borrow funds.   Many lenders only offer prime credit, which is available to only the lowest-risk borrowers. Prime lenders look at different factors including credit history, credit rating, income level, and history, and existing debt utilization. Customers who fail to meet the strict requirements or are considered a high-risk borrower, are not approved.  While the lender may have avoided high risk, the merchant loses the sale. The data show that when only prime credit is offered, roughly 70% of applicants are turned away.  This is a tremendous risk to merchants. 

How Merchants Can Avoid Getting Squeezed Out of Sales

Merchants who want to cash in on these trends of larger online purchases need to eliminate the credit squeeze.   The best way to eliminate the credit squeeze is to increase the supply of credit at checkout.   Not only do retailers need to offer consumers more financing options, they also need to make sure they provide options that meet the needs of customers of varying credit profiles, including prime, near-prime, and subprime. 

Merchants should think about point of sale financing in the same way they do credit cards.    They don’t partner with just one bank to accept only their credit cards.  Rather, they partner with platforms including Stripe and Authorize.net to accept hundreds of credit cards across every bank and network.  That one partnership allows the retailer to accept any credit or debit card, regardless of whether it’s a Citibank issued VISA card, a Chase Mastercard, or an American Express Platinum card.   So too should they do with point of sale financing.  Rather than partnering with one lender who lends exclusively to prime borrowers, retailers need to partner with a platform that will allow them to provide multiple financing options to customers across a broad range of credit profiles.