Author: Mark Denman

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 their 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. 

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.

5 crucial factors when choosing the best POS financing platform

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

1. Omnichannel experience

Customers are becoming accustomed to increasingly seamless and personalized shopping experiences. An omnichannel lending approach that covers in-store financing and eCommerce 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 POS financing platform includes a broad network of lenders. This way your financing offer can cover the entire credit spectrum, and 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. 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.

4. 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. 

5. 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.

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 Mark Denman
Mark has worked in the near-prime and tertiary lending space for 30 years. As EVP of Merchants Sales & Success at ChargeAfter, he ensures merchants and lenders are smoothly connected, cultivating exceptional experiences and revenue growth.

In today’s fast-paced retail environment, ensuring customers have seamless access to  financing choices is critical to boosting sales and building customer loyalty.  The ability to pay for goods over time through financing can be the deciding factor when completing a purchase. This is especially true during this period of inflation when people are more protective of their resources. Even without inflation, consumer demand for financing is likely to continue as credit cards drop in popularity with younger generations. 

One of the consequences of the rise of demand for consumer financing is that it has become impossible for merchants to create and manage an exceptional financing offer in-house. To manage a robust financing offer, retailers require a technology partner to integrate point-of-sale financing into modern customer journeys. This solution is best provided by a platform that can meet the needs of diverse customer profiles while being fast and easy to use for customers and merchants alike. Implementing the right consumer financing platform has become a strategic must for merchants. 

For leading merchants, ChargeAfter is the platform of choice. Here are seven reasons why.

7 Reasons Why Leading Merchants Choose ChargeAfter 

1. A seamless omnichannel financing experience
2. Expansive Network of Lenders
3. Easy integration and management
4. Unwavering Compliance and Security
5. Higher Approval Rates Equate to Increased Sales
6. Actionable Analytics and Data
7. Customize with White Label Consumer Financing

A Seamless Omnichannel Financing Experience

Your customers expect a seamless, omnichannel purchasing experience, especially for big-ticket items. Some customers start their purchasing journey online before heading to a brick-and-mortar store or interacting with a call center. Your financing offer must be embedded into these omnichannel journeys. Your offer must also be flexible enough to meet your and your customer’s needs and not be tied to rigid experiences, such as in-store stands serving a long line of customers.

ChargeAfter enables this with a state-of-the-art customer-facing application. It makes it easy for you to offer different ways to access financing choices at every point of sale. This can include a QR code in-store or online, sending customers a link to apply, promotional links on your eCommerce site, online pre-approval, and in-store devices – whatever works best for you and your customers.

Expansive Network of Lenders

With over 40 lenders embedded into ChargeAfter’s platform, you can easily offer your customers access to diverse financing products that to cater to every consumer, regardless of their financial standing. As a result, your approval rates are likely to increase to up to 85%. 

Especially during economic fluctuations, having a diverse range of lenders, including B2B financing options, ensures every customer is included. The platform also offers merchants the flexibility to introduce their preferred lenders. Such an expansive network ensures that you remain resilient against individual lender decisions and allows you to capitalize on every sales opportunity.

Easy Integration with Waterfall Finance Methods

The platform stands out with its simplicity. Merchants can enjoy easy integration of this embedded finance platform into their systems. ChargeAfter uses a waterfall finance method that instantly matches customers with the best lending offers suited for their credit profiles. Additionally, its post-sales management features—dispute resolution, refunds, and reconciliations—provide real-time insights. Such embedded financing ensures that merchants and consumers can transact with ease and speed.

Customize with White Label Consumer Financing

ChargeAfter’s white-label POS system allows customization for businesses prioritizing brand identity, reinforcing brand loyalty. Whether you’re seeking a white-label BNPL solution or comprehensive white-label consumer financing, ChargeAfter has you covered.

Unwavering Compliance and Security

Data security, especially in e-commerce financing, is paramount. ChargeAfter’s commitment to both transactional and personal data security is exemplary. Their platform ensures that every piece of data, from credit details to personal identifiers, is guarded against potential breaches. Furthermore, they adhere to all financial regulations, both federal and local. This commitment to embedded finance solutions, combined with unwavering security protocols, ensures merchants can focus on selling, free from the hassle of intricate financial regulations.

Higher Approval Rates Equate to Increased Sales

Through its multi-lender setup, ChargeAfter revolutionizes POS financing. With a broader spectrum of lenders, consumers enjoy a higher likelihood of loan approval, motivating them to finalize their purchases. This embedded lending approach ensures sales and makes your offerings more accessible to a broader audience.

Actionable Analytics and Data

Data-driven insights are crucial for improving customer experiences and optimizing sales strategies. ChargeAfter offers comprehensive analytics, allowing merchants to understand their customers’ buying journeys. Whether it’s identifying drop-off points or successful conversion moments, these insights enable the optimization of the POS lending process.

Case Study: Jerome’s

The success story of Jerome’s Furniture, a legacy brand with over six decades of experience, has been profoundly enriched by its partnership with ChargeAfter. Jerome’s astute integration of ChargeAfter’s consumer financing platform showcased how forward-thinking strategies can lead to exponential growth, even during economic uncertainties. With a commendable 67% increase in customer financing adoption, Jerome’s has ensured its clientele can afford quality furniture without financial strain. This case study underscores the pivotal role consumer financing plays in modern retail, exemplifying how strategic collaborations and a focus on customer-centric solutions can yield impressive outcomes.

Want to delve deeper into Jerome’s Furniture’s remarkable growth journey with ChargeAfter? Download the complete case study and discover the transformative power of consumer financing in the retail sector. Grab your copy now!

In conclusion, as merchants search for an efficient point-of-sale financing platform, ChargeAfter emerges as a frontrunner. Its focus on omnichannel lending and features like white-label BNPL solutions and waterfall financing ensures that merchants and consumers enjoy unparalleled experiences. In the evolving world of consumer finance and in-store financing, having a partner like ChargeAfter can be the game-changer that sets a business apart.

About Mark Denman
Mark has worked in the near-prime and tertiary lending space for 30 years. As EVP of Merchants Sales & Success at ChargeAfter, he is responsible for ensuring merchants and lenders get the best care possible.

As the retail landscape rapidly evolves, one financial trend has emerged as a game-changer, satisfying the ever-increasing demands of modern shoppers: point-of-sale financing. Point-of-sale financing has garnered significant attention in recent years because it provides shoppers with instant purchasing power, flexible payment options, and simplified access to the goods and services they desire. This article explores the rising consumer demand for point-of-sale financing and delves into the factors contributing to its popularity. From its seamless integration into the shopping experience to its appeal to a broad spectrum of consumers, we delve into the 5 most common mistakes retailers make with their consumer financing offer. 

The 5 Most Common POS Financing Mistakes Retailers Make

1. Working with a single lender
2. Ignoring the omnichannel experience
3. Providing a fragmented customer experience 
4. Overlooking the value of financing data to build customer loyalty
5. Adding additional lenders without using a platform

Mistake 1: Working With A Single Lender

To cater to their diverse customer base and offer the most favorable lending options, retailers must collaborate with multiple lenders catering to various credit profiles. Lenders typically specialize in specific customer segments, such as prime, near-prime, or subprime, and specific loan products like buy now pay later (BNPL), 0% APR, short/long-term installments, lease-to-own, etc. Additionally, geographical coverage is another aspect, as lenders typically only serve one region.

When a retailer relies solely on a single lender, it poses challenges. For instance, if a shopper is declined for a loan at the checkout stage, they have limited alternatives and are likely to abandon their shopping cart. This results in a lost sale and customer, as they might be deterred from future purchases. Moreover, if the lender with whom the retailer exclusively works changes their terms or ceases operations, they find themselves in a difficult situation without alternative lending options.

Update: 29 April 2024

Last month  Snap Finance published research last month reveals that to effectively serve a diverse customer base and avoid lost sales, retailers should consider offering a variety of financing options that cater to different credit profiles. Statistics highlight the importance of such flexibility; 44% of consumers with lower credit scores, for instance, are likely to seek alternative shopping destinations if financing options are not available. Moreover, when financing is accessible, 58% of these shoppers report spending more, with 79% increasing their purchases by $100 or more. This suggests that providing multiple lending solutions, including installment loans and lease-to-own options—used by 45% and 22% of subprime consumers, respectively, over the past five years—can significantly enhance purchase volumes and customer retention. Therefore, working with multiple lenders, each specializing in various financial products and catering to specific credit tiers, can help retailers mitigate the risk of customer abandonment and ensure a broader, more resilient financing ecosystem.

Mistake 2: Ignoring the Omnichannel Experience

It’s often said that one should never put all their eggs in one basket, and this is especially true when it comes to the sales experience. Customers are, in the end, individuals with different preferences when making purchases. It is important to offer a consistent experience regardless of how the consumer engages with your business.

Whether your customers are using an app, website, or physical store, they should enjoy a consistent experience, including when it comes to point-of-sale financing, regardless of how they choose to access your services. Shoppers who rely on financing to make a big-ticket purchase, for example buying furniture, will likely prefer to apply for financing online from home before heading to the store with their pre-approval to complete their purchase. This translates into other purchases that customers know they can’t access without financing and where they want to avoid the embarrassment of in-store declines.

Update: 29 April 2024

To provide a seamless omnichannel experience, it is equally essential to strategically offer point-of-sale financing options across various customer interaction points, not merely at checkout. Recent ChargeAfter data highlights that a significant 67% of finance applications commence before the checkout process. Integrating product widgets and “apply now” links directly on product pages allows customers the flexibility to apply for financing early in their shopping journey. This proactive approach caters to those making big-ticket purchases, such as furniture, who prefer to secure financing from the comfort of their home. It also significantly enhances the likelihood of increased transaction values and customer satisfaction across all purchasing platforms.

Mistake 3: Providing a Fragmented Customer Experience

While an omnichannel financing experience is critical, it isn’t the only barrier to a fragmented customer journey. When retailers fail to establish a streamlined process for loan applications and approvals, especially when integrating more than one lender into their offer, the result is a frustrating experience for customers. 

Consider a shopper applying for a loan at the point of sale, which gets declined. If the retailer offers more than one lending option, the customer who wants to continue looking for a loan has to start the application process all over again with a different lender. This repetition not only adds unnecessary inconvenience and time consumption for the customer but also creates a sense of frustration and confusion.

This poor experience leads to customer dissatisfaction, a loss of trust in the retailer, and potential purchase abandonment. Retailers should prioritize integrating their financing options into a single platform to establish a cohesive process that ensures a seamless customer experience, minimizing the need for multiple loan applications and reducing the likelihood of customer frustration and disengagement.

Jerome’s Furniture, a discount furniture chain store in Southern California, achieved a 67% increase in consumer financing adoption with high approval rates by embracing consumer financing as part of the customer journey with ChargesAfter’s embedded lending platform.

Mistake 4: Overlooking the Value of Financing Data to Build Customer Loyalty 

Data about customer financing is an invaluable asset that can help retailers make informed decisions across various aspects of their operations. By harnessing insights derived from customer financing data, retailers can enhance their marketing strategies, identify upselling opportunities, and optimize their lenders.

Customer financing data provides a comprehensive understanding of customer purchasing behavior and preferences. By analyzing this data, retailers gain insights into which products are most commonly financed, the preferred financing options, and the specific factors influencing customers’ decisions. With this knowledge, retailers can tailor their marketing strategies to target the right audience, showcase relevant products, and optimize promotional campaigns to resonate with customers’ financing preferences.

Access to individual shoppers financing data is a powerful way for retailers to build personalized customer relationships and highlights upselling opportunities. By analyzing shoppers purchasing patterns and financing histories, retailers can identify customers who have previously financed products and can invest in higher-priced items. With this information, retailers can personalize their sales approach, offer attractive financing options, and guide customers toward upgrading their purchases. This boosts revenue and enhances customer satisfaction by providing tailored recommendations based on their financial capabilities.

Moreover, retailers can leverage financing data to collaborate with lenders and optimize partnerships that provide their customers with the most successful financing options.

Mistake 5: Adding Additional Lenders Without Using a Platform 

Adding additional lenders without using a point-of-sale (POS) platform contributes to a poor customer experience and makes managing post-sale processes such as refunds, reconciliations, and disputes exceptionally complicated. Without a centralized system, each lender operates independently, making it difficult to streamline and coordinate these critical activities. 

Without an embedded lending platform, managing post-sales transactions becomes a cumbersome process. Each lender may have different refund policies, procedures, and timelines, making it hard to ensure consistent and efficient processing. Reconciling transactions across multiple lenders becomes equally complex, as there is no centralized mechanism to track and match payments, leading to potential errors and discrepancies.

Handling disputes becomes a more arduous task as well. Without a unified platform, resolving issues requires interacting with each lender separately, prolonging the resolution process and causing frustration for customers and retailers. The lack of streamlined communication channels and standardized dispute-resolution procedures can result in inconsistent outcomes and an unsatisfactory customer experience.

Additionally, compliance becomes more complicated without a platform. Each lender may have its own regulatory requirements, and managing and ensuring adherence to these varied compliance standards can be daunting. This increases the risk of non-compliance and potential legal issues for lenders and merchants.

Conclusion – A Platform-First Solution

Retailers are increasingly turning to ChargeAfter to embed multiple lenders into a single platform that is easy to integrate and manage to avoid making these 5 point-of-sale financing mistakes. 

The multi-lender approach increases the likelihood that shoppers who seek financing will be approved, with approval rates reaching up to 85%. Unlike single-lender systems, multi-lender platforms meet the needs of shoppers across the credit spectrum, enabling more customers to make purchases through a fast and seamless experience. This broader access to financing options enhances the customer experience, fosters loyalty, and ultimately drives higher sales and AOV. 

Moreover, the embedded lending platform empowers retailers to offer competitive financing terms to their customers. With different lenders integrated into the platform, they can cater to individual customer preferences, enhance their value proposition, and stay ahead in a competitive market.

In addition to customer benefits, ChargeAfter streamline the financing process for retailers. Rather than managing multiple lender relationships and systems, retailers can leverage a single platform that consolidates the entire financing workflow. This simplifies operations, reduces administrative overhead, and saves valuable time and resources.

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