It’s no secret that the COVID19 pandemic has changed many things about the world we knew. While it has caused some disruption in our day to day lives, the pandemic has hit the economy the hardest. Consumer spending dropped by a staggering 7.5% during the economic closures around the world in March and April. This estimates a decline of nearly $1 trillion in revenue, which the US economy has not seen since 1987.

Unfortunately, this has led to many people losing their income and with that, their ability to make costly purchases. Consumers are rather using the money they have to pay off existing debts. In addition to that, consumers are more conscious of how they spend their money and are growing wary of using credit cards due to the interest that adds to already mounting bill payments. According to large credit providers, transactions made by credit cards decreased by 31% by the end of April. 

Retail and eCommerce stores have had to adapt to the current crisis and change the way they operate in order to meet the demands of consumers, which means taking consumer’s financial constraints into consideration. The goal for many retailers now is to offer flexible payment methods to help reduce some of the financial burdens the pandemic has created. Buy Now, Pay Later or also known as Point Of Sale financing has been the solution for many consumers and merchants alike and continues to grow in popularity during this uncertain time. 

Buy Now Pay Later Has Provided More Financial Security 

Due to the structure of Buy Now, Pay Later financing, it has become a viable solution for most businesses. Taking a large purchase and breaking it down into smaller monthly payments allows consumers more financial flexibility when purchasing expensive goods. Another reason why this payment method has become more attractive to consumers is that in most cases, it comes without interest if the consumer is able to pay off the loan quickly. 

The terms offered by Point Of Sale financing partners like ChargeAfter also make it easier for consumers to apply and get approval for instant loans. The pandemic has affected the income of many people and some are not earning as much as they used to. 

With prime lenders and larger credit providers, income is usually the deciding factor. And should a consumer not fall into the earning bracket requirement, they are turned away. The Buy Now, Pay Later model caters to those who prime lenders see as a high-risk borrower and offer more flexibility in terms of approvals and payback terms. 

This has allowed consumers to purchase or replace higher value goods like refrigerators and furniture even in a time when financial pressures are at an all-time high without using a single credit card.  

The Shift From Traditional Credit

Long before COVID19 ravaged throughout our cities, Buy Now Pay Later solutions were already gaining steady traction, especially among the younger generations like millennials. However, the need for these payment plans have become more prevalent in the wake of the pandemic. 

The younger demographics who may not have steady jobs or who are currently relying on their savings to get through this current global situation have become more inclined to online financing like Buy now Pay Later. According to research, only 34% of millennials added to their credit card debt since COVID19. This could be due to many factors, however, these are the consumers who are most aware of the interest, bad credit ratings, and debt associated with credit cards and are turning away from them altogether. With preexisting financial strains like mounting student loans and other high-interest debts, the younger demographic already has a distaste for traditional credit. 

Buy Now Pay Later has quickly become the solution to purchasing high ticket items among the younger generations. It offers more transparency with predetermined monthly installments that do not have any extra “surprises” on the bill and also enable consumers a sustainable and affordable way to get the goods they want. 

Based on this, there is no doubt that Point Of Sale financing will continue to grow steadily as the world returns to a new normal. 

 

Key Features Of ChargeAfter’s Point Of Sale Financing Platform

Partnering with an established and trusted Point of Sale financing provider can help empower your business. From increasing revenue to improving customer retention and reducing abandoned carts, there is certainly no shortage of benefits when it comes to offering online financing. However, with most consumer financing partners, integrating these solutions into your business can be a tedious and lengthy process. In most cases, it requires complex development and time to wrap your head around the system not to mention the time it takes to train staff members. This all takes up vital resources that could be used to focus on key components of your business. 

ChargeAfter has developed an online platform that eliminates most of these frustrations by providing merchants with a state of the art decisioning engine, omnichannel technology, and endless resources to help unlock the platform’s full potential and maximize your brand’s profits. Here are a few key features of the ChargeAfter POS financing platform:

Seamless Integration And Testing

ChargeAfter’s platform simplifies integrations based on your needs by using 3 different channels. This allows merchants to choose the best approach based on their existing systems, sales, and functionality. These include:

• Integration using eCommerce plugins for major platforms including Shopify, Magento, WooCommerce, BigCommerce, and other renowned platforms available on the market.
• JavaScript SDK that can be integrated into stores who do not work with the supported platforms mentioned above but rather use their own custom-built systems and technologies. 
• Custom-developed integrations via the RESTful API that allow merchants to build a unique checkout experience while using ChargAfter’s core capabilities and functionality. 

In addition to seamless integration, ChargeAfter also provides merchants with testing tools and a Sandbox environment to ensure your current system and processes are not affected during development and integration. 

White Label Options

Using a consumer financing partner platform shouldn’t mean that your branding and identity are lost during the application and checkout process. Your customers identify with your brand and ChargeAfter is dedicated to making your brand shine, not ours. Our white label solutions allow you to customize and personalize the entire shopping cart financing experience inline with your corporate identity.  

Omni-Channel Financing

ChargeAfter’s functionality and capabilities are not limited to one location or eCommerce platform. Merchants can use our integrations in retail stores or call centers in any location. Merchants are also able to offer consumer financing across multiple currencies, which is extremely beneficial for brands that are expanding their global reach.

Account Management And Reporting

One of the downsides to some platforms is that there are limited capabilities when it comes to full reporting and actions on accounts. ChargeAfter provides merchants with a comprehensive dashboard that enables you to cancel, refund, reconcile, or settle paid-up accounts. The reporting features also allow you to track and measure data, which is beneficial for marketing, upselling, and forecasting. 

Direct Access To A Multi Lender Network

You don’t need to spend the time or effort trying to source a network of lenders. The ChargeAfter platform connects to various trusted lenders in the industry that will facilitate the loan and payment terms based on the applicant’s details. Having a variety of lenders will also help improve approval rates. More approvals mean more happy customers and more sales for your business.

Security

Everyone is entitled to data security and privacy, something that is always top of mind for ChargeAfter. When dealing with sensitive information like payments and personal information, it is important to have the tools in place to protect that data at all costs. The ChargeAfter platform is ISO/IEC 27001:2013, 27018:2014, and PCI level 2 certified and offers security features like fraud prevention to keep all merchants, lenders, and consumers data safe.

Additional Support

As we mentioned before, limited resources can cost your business and staff a lot of time. The ChargeAfter team offers 24/7 customer support for any errors, issues, or questions you may have about the platform. Whether your staff needs a little assistance with processing a settlement or needs help with creatives for your online financing campaigns, someone is always available to assist.

What Is The Difference Between Traditional Credit And Point Of Sale Consumer Financing?

Consumer financing has become a pivotal part of the shopping journey. For many, paying for high ticket goods like electronics and furniture upfront is almost impossible, which is why there is an expectation for more flexible financing options in the retail space. The option to use credit cards has always been available for most shoppers, but is it the most financially savvy decision?

The short answer is no. Some of these items could cost you up to $2,000 or more and just because it is not coming from your own pocket, it is still a hefty amount to pay upfront, not to mention that you start eating into your credit balance. Fortunately, there are more affordable financing options out there like ChargeAfter’s Buy Now, Pay Later online financing. 

Let’s dive deeper into the main differences between these two payment options to see why Point Of Sale financing is becoming the leading choice of payment amongst consumers.

The Downfall Of Traditional Credit Cards

Credit cards have been the dominant source of financing in the past, however, it has also become synonymous with mounting debts and severely affected credit ratings. The problem with this type of financing is that consumers are forced to pay the total amount for their goods upfront. This means that the consumer depletes their available credit faster and the monthly charges to pay back the outstanding balance are far more costly due to fluctuating interest rates, services fees, and additional APR costs ranging from a staggering 17%. In many situations, buying on a credit card leaves little room for emergency expenses when it’s needed the most – and why should consumers be forced to choose between buying a new mattress and rainy day funds? 

Getting approved for credit is no easy feat either and many do not meet the criteria. In fact, up to 70% of applications are rejected due to their current income, existing debts, and credit history.

It is because of these reasons that more and more people are steering clear of traditional forms of credit. According to recent research, 68% of Millennials do not own a single credit card and Gen Z is following suit with this trend. This leaves a large gap in the market and instead of capturing the attention of these shoppers, they are either forced to make do without or to save over a few months just to get the goods they want, which is not the ideal outcome for any merchant.

Opening The Door Of Opportunity With Point Of Sale Consumer Financing 

Buy Now, Pay Later solutions hone in on the pain points associated with traditional lines of credit and help put the buying power back into the hands of consumers. While this form of borrowing isn’t a new concept, it has evolved in favor of both the consumer and merchant. Unlike credit cards, shoppers do not have to foot the entire bill on purchase. Instead, they are able to purchase the product with an instant loan that offers affordable payback plans. 

For example, if Charlie is looking to buy a new MacBook Pro, he is in for a total amount of around $2,400. Instead of putting the total cost on his credit card and depleting his balance, Charlie is able to opt-in for ChargeAfter’s online financing solutions. After filling in a quick application form, Charlie’s details are vetted against various lenders, and once approved, he gets access to an instant loan. Charlie gets his goods immediately with no extra charges to his credit card and gets to enjoy a 12-month payback plan with a 12% interest rate and no APR’s. His total monthly costs to pay back the loan would be $196, which does not fluctuate or affect his credit score. 

Charlie has a new MacBook Pro, a positive balance on his credit card for emergency expenses, and a generous amount of time to pay back the loan without ever leaving the checkout. And as the merchant, you have a new sale and a happy customer who is more than likely going to return to your store after receiving a positive and easy financing experience!

 

Point-of-sale (POS) consumer credit financing has revolutionized how businesses tap into new markets by combining technology with the rising demand for instant gratification. By offering shoppers more flexibility in payment options, businesses open doors to increased revenue, larger basket sizes, and a seamless customer experience. This applies to high-ticket items like cars or home appliances and everyday products like shoes or accessories.

So, what makes these instant loans so effective at driving sales? It’s all about credit distribution and approval rates. With the right POS financing partner offering smooth credit distribution and higher approval rates, merchants can experience significant profit growth and see more return customers.

Explore the different credit distribution models through in-store and online POS financing.

How does consumer POS financing work?

Consumer POS financing, also known as buy now pay later (BNPL), offers shoppers the flexibility to purchase items without immediately using credit cards or cash. Customers select the BNPL option at checkout and quickly fill out an application. The approval process happens instantly, without leaving the page, as the customer’s data is verified against lender criteria. Once approved, they can repay the loan over a set period.

Single-Lender Credit: Challenges for Merchants

In many cases, POS financing providers use a single lender for credit distribution. This means customer data is matched against one prime lender’s criteria at checkout. Prime lenders typically approve loans based on low-risk borrowers with high credit scores and stable incomes. Customers’ loan application is denied if they don’t meet these requirements.

Although the lender avoids high-risk borrowers, merchants often lose sales. Unfortunately, roughly 70% of applications are rejected with a single lender platform, resulting in missed opportunities for businesses.

Multi-lender credit distribution model

Unlike single-lender models, a multi-lender credit distribution platform gives consumers access to a network of lenders, increasing the chances of loan approval. If a customer fails to meet the criteria for prime lenders, their data is reviewed by near-prime and sub-prime lenders. This layered approach ensures that customers who may not qualify for traditional credit still have a chance to make purchases.

For the merchant, this means fewer missed sales and higher approval rates. A multi-lender network increases approval rates from the typical 30% in single-lender models to as high as 85%, allowing more customers to complete their purchases through POS financing.

Credit flexibility and omnichannel lending

The integration of POS financing across in-store and online channels, known as omnichannel lending, ensures that customers have flexible payment options wherever they shop. Whether through an in-store checkout process or an online platform, the customer experience remains seamless. This drives sales and encourages repeat purchases, as customers appreciate the convenience of choosing their preferred financing option.

With omnichannel lending, retailers can offer a consistent experience, meeting the growing demand for flexible credit solutions that cater to individual financial situations.

Benefits of a Multi-Lender Credit Network for Merchants

A multi-lender credit platform benefits consumers and boosts merchant revenue. Businesses can attract a broader range of customers by providing more flexible credit options. Additionally, higher approval rates lead to fewer abandoned carts, improved customer satisfaction, and more excellent overall sales.

The role of embedded lending in consumer financing

Embedded lending enhances the customer experience by integrating credit options directly into the shopping journey. Whether customers purchase in-store or online, embedded lending solutions allow them to select a financing plan without leaving the checkout page. This seamless integration reduces friction, ensuring customers can make decisions quickly and confidently.

For businesses, embedded lending platforms streamline the purchasing process and offer a more personalized approach to credit distribution. By leveraging customer data, these platforms can tailor financing offers that suit the buyer’s unique needs, resulting in higher conversion rates and customer loyalty.

Boost Your Business with a White-Label Credit System

A white-label POS system allows merchants to offer branded financing options while maintaining complete control over the customer experience. By partnering with white-label providers, businesses can integrate custom POS financing solutions that align with their branding and meet their specific goals. This level of customization is critical to building a solid relationship with customers, as they can trust the business to offer reliable and accessible credit solutions.

Additionally, white-label POS systems offer flexibility across multiple payment options, including BNPL, allowing consumers to choose the best credit terms for their financial situation.

Critical advantages of omnichannel financing for retailers

Implementing omnichannel financing allows retailers to bridge the gap between online and offline shopping, ensuring a smooth and unified customer experience. Whether shopping online from home or visiting a physical store, omnichannel lending enables consistent access to credit options.

Retailers benefit from offering a more integrated shopping experience, resulting in improved sales, increased customer retention, and the ability to capture a larger market share.

The role of embedded lending in consumer financing

Embedded lending enhances the customer experience by integrating credit options directly into the shopping journey. Whether customers purchase in-store or online, embedded lending solutions allow them to select a financing plan without leaving the checkout page. This seamless integration reduces friction, ensuring customers can make decisions quickly and confidently.

For businesses, embedded lending platforms streamline the purchasing process and offer a more personalized approach to credit distribution. By leveraging customer data, these platforms can tailor financing offers that suit the buyer’s unique needs, resulting in higher conversion rates and customer loyalty.

Boost your business with a white-label pos system.

A white-label POS system allows merchants to offer branded financing options while maintaining full control over the customer experience. By partnering with white-label providers, businesses can integrate custom POS financing solutions that align with their branding and meet their specific goals. This level of customization is key to building a strong relationship with customers, as they can trust the business to offer reliable and accessible credit solutions.

Additionally, white-label pos systems offer flexibility across multiple payment options, including bnpl, allowing consumers to choose the best credit terms for their financial situation.

Critical advantages of omnichannel financing for retailers

Implementing omnichannel financing allows retailers to bridge the gap between online and offline shopping, ensuring a smooth and unified customer experience. Whether shopping online from home or visiting a physical store, omnichannel lending enables consistent access to credit options.

In-store financing: A key driver for consumer loyalty

In-store financing is an essential element of modern retail, allowing customers to purchase without paying upfront. By offering credit options at the point of sale, businesses can make high-value items more accessible to a broader audience. This leads to increased customer satisfaction, higher conversion rates, and stronger long-term loyalty.

Consumers appreciate the convenience of readily available in-store financing options, as they simplify the purchasing process and provide flexible repayment terms. For retailers, in-store financing encourages repeat visits and enhances customer relationships, ultimately driving growth.

Enhance your revenue with an embedded finance platform.

An embedded finance platform allows businesses to integrate credit solutions directly into their sales process, whether online or in-store. By partnering with a robust embedded finance platform, companies can offer a seamless financing experience that aligns with the customer journey. This improves conversion rates and increases customer satisfaction by providing tailored credit options that meet individual needs.

By leveraging embedded finance solutions, businesses can reduce cart abandonment and boost overall sales while creating a more efficient, customer-focused experience.

White-label BNPL solution: Customizing your financing offer

A white-label BNPL solution empowers businesses to offer personalized buy-now-pay-later services that reflect their brand. By tailoring BNPL to match specific customer segments, merchants can provide flexible payment options that cater to different financial situations. This customization enhances customer trust and drives repeat purchases.

Furthermore, offering a white-label BNPL solution allows businesses to control the branding and user experience, ensuring that customers associate positive interactions with their company while benefiting from the infrastructure provided by BNPL providers.

The future of e-commerce financing

E-commerce financing is becoming increasingly important. With more consumers shopping online, businesses need to offer flexible credit solutions that cater to this growing demand. By integrating e-commerce financing options such as buy now, pay later, and other POS lending solutions, businesses can tap into a larger market, reduce cart abandonment, and increase sales.

Offering e-commerce financing ensures customers can access the products they want without worrying about immediate payment, making the online shopping experience more convenient and accessible.

Omnichannel lending: Unifying online and in-store experiences

The concept of omnichannel lending unites the flexibility of online financing with the convenience of in-store financing, creating a cohesive customer experience. Whether a customer is shopping online or visiting a physical store, omnichannel lending provides consistent access to credit options, allowing them to choose the payment terms that best suit their needs.

This unification benefits retailers and consumers, simplifying the financing process across multiple channels, increasing customer satisfaction, and driving higher sales. By offering omnichannel lending, businesses can build a loyal customer base and remain competitive in an increasingly digital marketplace.

Embedded lending networks: Expanding customer reach

By utilizing an embedded lending network, businesses can expand their customer base by offering more accessible credit options. These networks connect merchants with multiple lenders, increasing the chances of loan approval for customers with varying credit histories. With a broader selection of financing partners, businesses can provide tailored credit solutions that suit diverse customer needs.

An embedded lending network improves the customer experience and boosts sales by reducing barriers to purchase. For businesses, this means fewer missed opportunities and a more decisive competitive edge in the marketplace.

Choosing the Right POS Credit Financing Platform

Selecting the right pos financing platform is crucial for driving sales and enhancing customer satisfaction. The best platforms offer a seamless, integrated experience that allows customers to quickly apply for and receive credit at the point of sale. This ease of use can significantly impact a customer’s purchase decision.

When choosing a pos financing platform, businesses should consider factors such as approval rates, integration capabilities, and customization options to ensure they provide their customers with the best possible experience. A well-chosen platform will drive both customer loyalty and increased revenue.

Buy Now Pay Later – A valuable solution for today’s online merchants & shoppers

As the coronavirus outbreak continues and “shelter in place” guidelines are extended, US eCommerce is prospering and has become the new norm. Consumers are spending more on furniture, apparel, footwear, and accessories. Data suggests that shoppers are likely buying comfortable items to work from home, diving into home improvement projects, or purchasing workout gear that will get them through the next several weeks of being confined to their households. Consumers are also taking advantage of Buy Now Pay Later options as it gives them control and flexibility over their payments. 

Furniture Today reported that online browsing for furniture alone has increased 200% within the last month, this suggests consumers are spending an increased amount of time on the internet browsing. Consumers are paying more attention to marketing messages, social ads, and more. Further research demonstrates that consumers aren’t necessarily spending less money but they aren’t spending more money either. Rather consumers have turned to make their purchases entirely online. Consumers are now looking for more viable alternatives for items they’re used to purchasing in-store and are open to purchasing more comparable products, in fact, it’s been reported that over 40% of consumers have been trying new brands. 

Businesses across the globe are being challenged to think differently about how to approach customer acquisition and retention in light of COVID-19. The best action merchants can take is to connect with their consumers on a basic human level. Educate consumers through your marketing efforts on how you are tackling COVID-19 and/or include pictures of your staff taking all the necessary safety precautions during this time. Another immediate action you can take to maintain business continuity is by offering your consumers Buy Now Pay Later solutions.

ChargeAfter enables merchants to offer Buy Now Pay Later solutions to their consumers across all credit tiers (prime, near-prime and sub-prime), this way all consumers have access to acquire the products they need, today. Imagine having a conversation with your shoppers at the point of sale and asking them what monthly price they feel comfortable paying and how long they would like the monthly payments to last. Think about the surprise and satisfaction that would bring your buyers. Point of Sale Financing or Buy Now Pay Later is essentially just that, it’s offering your shoppers choice and flexibility in payment options.

Merchants using ChargeAfter as the Point of Sale financing platform can approve up to 85% of their consumers’ applications. Shoppers will have the option to finance their purchase between a period of 6 – 48 months while enjoying 0% APR. The diverse group of global lenders ChargeAfter works with allows us to offer the highest approval rates for consumers who apply for financing. More than ever consumers are demanding flexibility in payment options, it’s necessary to adapt to buyers’ demands to fuel business stability and continuity. 

The Buy Now Pay Later option ChargeAfter provides merchants would be seamlessly embedded in their checkout process. Meaning, Point of Sale Financing would be another payment option offered alongside traditional payment methods such as Visa, MasterCard, Paypal, and more. Once the consumer selects financing as an option, the entire process would take place on the merchants’ website without any redirects to a subdomain. Forrester reported that merchants who offer point of sale financing from a single lender have seen a 32% increase in sales, however, merchants who offer Buy Now Pay Later solutions from ChargeAfter, a multi-lender platform, have enjoyed a 45% increase in sales! Before signing up to offer a point of sale financing from both a single lender or a multi-lender provider, knowing the platforms’ average approval rates should be on the top of your due diligence. Single lenders only focus on approving the top 35% of consumers with pristine credit which means they’re declining 70% of consumers who apply for financing at checkout which leads to increased site abandonments, cart abandonments, and your rejected potential consumers ending up completing their purchase by your competitor. 

When merchants meet consumers halfway by offering Buy Now Pay Later financing options, it enables a stronger relationship, and consumers are more likely to become returning shoppers due to the choice and flexibility being offered. At ChargeAfter our goal is to help your business thrive even through challenging economic conditions.