Author: ChargeAfter

Furniture plays a crucial role in our lives, enhancing our spaces and reflecting our personal styles. In the past, purchasing big-ticket items like beds, couches, and desks required a visit to a physical store. However, with the growth of eCommerce, this opportunity is changing. Did you know that 81% of consumers now start their shopping journey online? The internet makes it easier for consumers to research, compare, and purchase products from anywhere. Alongside this shift, point of sale financing has also transitioned from traditional in-store options to online platforms.

Point of sale financing (POS financing), also known as checkout financing, consumer financing, micro-financing, or “buy now, pay later” (BNPL), offers significant benefits to both consumers and merchants. It serves as an alternative payment method, enabling consumers to avoid hefty credit card bills by providing financial solutions at the point of purchase. This method divides purchases into manageable payments, making it an ideal option for mid to high-value checkouts.

Opportunity for merchants with POS financing

Merchants who incorporate POS financing into their checkout process can offer several advantages to their customers:

• Positive customer experience
• Higher conversion rates
• Increase in average order values (AOVs)
• Wider customer base
• User-friendly experience

Consumers today prefer using their debit cards over credit cards due to high-interest rates, which can range from 18% to 29.9%. Excessive use of credit cards can negatively impact a consumer’s credit score. Point of sale financing provides a solution, eliminating friction for shoppers who may not qualify for personalized loans or prefer not to use credit cards. Since point of sale financing is a form of personal loan not linked to a credit card, it can help improve credit scores through consistent on-time payments.

Opportunity: rise in short-term installment loans

There has been a notable increase in short-term installment loans over the past 3-5 years. According to Visa’s chief economist, there is a “massive increase in alternative lending.” About 70% of purchase installment loans are short-term, typically lasting between 3 to 12 months. It’s no surprise that 74% of U.S. cardholders find installment plans helpful for budgeting, and 70% believe they reduce the stress of making a large purchase upfront. By offering point of sale financing, merchants can strengthen their relationships with customers.

Enhancing customer loyalty with POS financing

Offering point of sale financing isn’t just about increasing average order values; it’s also about building customer loyalty. When consumers are presented with flexible financing options at checkout, they feel valued and understood. This tailored shopping experience can significantly boost customer satisfaction, leading to repeat purchases and long-term loyalty. Moreover, merchants using an embedded lending platform can provide customers with a seamless and integrated financing experience, whether shopping online or in-store.

Seizing the opportunity with omnichannel retail financing

In today’s retail environment, customers expect a smooth shopping experience across all channels. By integrating embedded financing solutions, merchants can offer consistent and convenient payment options both online and in physical stores. This omnichannel lending approach ensures that customers can access financing whenever and wherever they shop, enhancing their overall experience. A well-implemented embedded finance platform enables customers to start their shopping journey online and complete it in-store, or vice versa, with ease.

Opportunity for growth with B2B financing

The opportunity for growth in B2B financing is immense, especially as more businesses seek white label POS systems and BNPL solutions to better serve their customers. These embedded lending networks provide merchants the ability to customize financing options to suit their brand and customer base. By offering white label BNPL solutions, businesses can provide a personalized checkout experience that encourages higher spending and builds brand loyalty. The demand for in-store finance options alongside ecommerce financing is rising, making omnichannel financing a crucial strategy for retailers aiming to stay competitive.

Selecting the right embedded finance platform

Choosing the right embedded finance platform is crucial for merchants who want to maximize the benefits of point of sale financing. A robust POS financing platform should offer:

• Multiple lender options to cater to diverse customer credit profiles
• Easy integration with existing systems for a seamless checkout process
• Flexible financing terms that align with customer needs and business goals
• Data security and compliance to protect customer information

By implementing a comprehensive embedded lending platform, merchants can offer a superior checkout experience that drives customer satisfaction and increases sales.

Benefits of implementing a white label BNPL solution

For businesses looking to enhance their brand identity and customer experience, implementing a white label BNPL solution can be transformative. By offering buy now, pay later options under their branding, merchants can:

• Build stronger brand recognition with a cohesive shopping experience
• Increase customer trust through familiar and branded payment solutions
• Customize financing options to better meet their target market’s needs

A white label BNPL system allows retailers to maintain control over customer interactions while providing the flexible financing options that shoppers are increasingly seeking. This can lead to higher customer retention rates and increased sales opportunities.

The growing importance of in-store financing

While eCommerce continues to grow, in-store shopping remains a significant part of the retail landscape. Offering in-store financing options is crucial for merchants who want to provide a complete omnichannel experience. In-store financing enables customers to make immediate purchases without the upfront financial burden. It also helps merchants capture sales that might otherwise be lost due to high ticket prices. By incorporating embedded financing solutions into physical stores, retailers can offer the same convenient payment options found online, ensuring a seamless shopping experience across all touchpoints.

Conclusion: maximizing every sale opportunity with POS financing

The rise of point of sale financing presents a significant opportunity for both consumers and merchants. By offering flexible and personalized financing options, merchants can enhance the shopping experience, increase average order values, and foster customer loyalty. Whether through embedded financing networks, white label BNPL solutions, or omnichannel lending strategies, businesses have the tools to meet the evolving needs of their customers. Implementing a robust POS financing platform allows retailers to not only maximize every sale opportunity but also position themselves for sustained growth in a competitive market.

 As a furniture retailer, you face numerous challenges, from intense competition to driving more foot traffic and encouraging customers to spend more on high-ticket items. The ultimate goal is to boost conversion rates. Here are four innovative strategies to help merchants drive sales and stand out from competitors.

Build a brand competitor can’t match.

Content marketing takes many forms, including blogs, webinars, and social media posts. Since this is often consumers’ first interaction with your brand, creating engaging and educational content is critical. Whether shopping for furniture or exploring embedded finance solutions, well-crafted content can drive demand while keeping costs low.

For instance, a mattress brand, Purple, has achieved tremendous success through content marketing. OverthinkGroup says “purple mattress” is searched 400,000 times a month on Google, outpacing even the generic term “mattress.” Over 71% of Purple’s organic traffic comes from branded search terms, which shows the importance of building a brand that customers seek out directly.

However, digital advertising can get expensive. Retail Dive reports that Google’s cost-per-click (CPC) has risen 14% in the past year, and keywords like “best couch” or “best dresser” are no longer as cost-effective. To maximize your organic traffic, build a brand that people search for—just like Purple—by consistently producing relevant, engaging content.

Outpace competitors with promo code pages

Furniture purchases can range from a few hundred to several thousand dollars, and customers often look for discounts at checkout. Instead of allowing customers to search elsewhere for coupons, why not host a promo code page directly on your website?

You can offer exclusive promotions or discount codes to customers who subscribe to your newsletter. This increases conversions and presents an opportunity to engage customers through email marketing. OverthinkGroup reports that Purple’s discounts and promotions page is one of its top SEO pages. By creating a similar page, you can offer e-commerce financing, special promotions, and product information directly to interested shoppers.

Offer better financing options than competitors.

Providing point-of-sale (POS) financing at checkout is essential to drive more sales, especially for high-ticket items. This type of embedded financing offers customers the flexibility to purchase what they need without the immediate burden of total payment. By integrating POS lending into your checkout process, you make it easier for customers to make purchases, both in-store and online.

For example, a customer purchasing a $3,949 sectional sofa might hesitate to put the total amount on their credit card due to high interest rates. With POS financing, customers can apply for funding and choose a payment plan that suits their budget. This increases conversion rates and leads to larger order values as customers feel more comfortable adding additional items to their purchases.

Offering white-label POS systems allows retailers to give customers more purchasing power, increase order values, and boost satisfaction. Flexible financing options such as BNPL white-label solutions and omnichannel lending further enhance the customer experience by providing personalized payment plans.

Beat competitors with omnichannel financing.

Consumers today expect a seamless shopping experience across all platforms—whether in-store, online, or through a mobile app. Offering omnichannel financing ensures that customers can access flexible payment options regardless of where they shop. By partnering with an embedded lending platform, retailers can provide consistent online and in-store financing options.

Retailers who embrace white-label BNPL solutions or POS financing platforms can offer customized payment plans tailored to their customer base. These solutions help improve conversion rates and boost customer loyalty by making large purchases more accessible. Providing omnichannel financing allows customers to choose their preferred payment method, allowing them to stand out from competitors.

Leverage embedded finance to reduce cart abandonment.

Cart abandonment is a significant issue for retailers, particularly in e-commerce. Studies show that 81% of consumers abandon their carts, often due to overwhelming order values or limited payment options. Offering embedded financing at checkout can help reduce this issue by allowing customers to break up payments into manageable amounts.

With embedded financing solutions, customers are more likely to complete their purchases. Offering POS financing and BNPL white label services at checkout provides customers with more payment options, improving the likelihood of conversion. By embedding these options directly into the checkout process, customers can easily access funding without leaving your website.

Use white-label BNPL solutions for a seamless experience

Buy Now, Pay Later (BNPL) services are rapidly gaining popularity among consumers. Retailers can tap into this demand by offering white-label BNPL solutions, which allow customers to split payments while keeping your brand at the forefront.

This type of embedded finance is beneficial for large-ticket items, where customers may hesitate to pay the total amount upfront. By offering flexible payment options like BNPL, you create a better shopping experience that encourages customers to complete their purchases.

Incorporating white-label BNPL solutions strengthens brand loyalty by providing a seamless and branded financing experience. Customers are more likely to trust your business and return for future purchases when they can access flexible payment options.

The furniture and home goods industry, encompassing the manufacturing, distribution, and retail of home furnishings, is undergoing significant changes. This includes household decor, soft furnishings like draperies and curtains, appliances, cookware, and gardening equipment. The 2008 recession dramatically impacted the global home industry as consumers cut back on non-essential spending. As disposable incomes dropped, home improvement projects were put on hold.

While the economy has since recovered, consumer spending habits have shifted, particularly among Millennials. The 2008 financial crisis divided this generation into two distinct groups. Older Millennials, Gen X, and Baby Boomers faced challenging job markets and stagnant wages, making saving difficult. On the other hand, younger Millennials, who entered the workforce post-recession, have become more risk-averse, having witnessed the financial difficulties firsthand. This change in economic behavior is evident in their attitudes toward credit and consumer financing.

According to The Washington Post, Americans aged 18-35 have decreased their net worth by 34% since 1996. Middle-class life is 30% more expensive than it was two decades ago, with rising rent and college education costs. However, as the economy stabilizes, consumers regain confidence and demand more flexible payment options, particularly when purchasing big-ticket items like furniture.

Changing consumer behavior: The rise of POS financing

InfluencedToday by the recession and their parents’ experiences with credit card debt, today’s young adults are increasingly favoring debit cards. 63% of Millennials and Generation Z do not own a single credit card, even though they will make up more than half of the consumer market in the coming years. As merchants, it’s crucial to consider how the declining use of credit cards might affect your sales.

This is where point-of-sale (POS) financing comes in. By offering flexible payment options like POS lending and BNPL white-label solutions, you can cater to younger consumers who either can’t or don’t want to apply for traditional credit cards. According to American Banker, short-term installment loans have gained popularity in recent years, with 87% of consumers expressing interest in paying for large purchases via monthly installments.

What is POS financing and how does it work?

POS financing, also known as embedded financing, offers consumers an alternative payment method without relying on credit cards. Customers can choose in-store or e-commerce financing at checkout alongside traditional methods like Visa and PayPal. Once selected, the consumer completes a simple financing application directly on the merchant’s website.

The process is powered by an embedded finance platform integrated with a white-label POS system. This ensures a seamless user experience with no redirects. The financing application goes through an embedded lending network, where lenders compete to offer the best financing terms. Customers can pay over 6, 12, 18, or even 48 months, often with 0% APR when specific terms are met. Thanks to their extensive embedded lending platform, solutions like ChargeAfter report 85% approval rates.

How POS financing benefits furniture retailers

As consumer spending habits evolve, furniture retailers must adapt to new payment trends to remain competitive. POS financing platforms like ChargeAfter provide retailers with tools to offer omnichannel financing, helping to boost sales both online and in-store. By integrating in-store financing options, furniture merchants can provide customers more flexibility at checkout, encouraging higher purchase amounts without the upfront financial burden.

According to recent studies, furniture retailers who utilize POS lending have seen their average order value increase by 45%. This rise in order value is primarily driven by the ability to break down large purchases into smaller, manageable payments. For furniture, which is often a high-ticket item, offering BNPL white label or white label BNPL solutions can significantly improve customer satisfaction and increase conversion rates.

By providing embedded finance solutions, furniture retailers cater to the growing preference for installment payments and enhance their brand’s overall shopping experience. Whether an e-commerce platform or a physical store, offering white-label POS systems ensures seamless transactions, keeping customers engaged throughout the purchasing journey.

The importance of embedded lending in furniture sales

Implementing embedded lending solutions is becoming increasingly essential for furniture retailers. Consumers are now looking for more than just product quality—they want flexibility and convenience when it comes to financing. With an embedded lending platform, merchants can offer tailored financing solutions based on individual customer needs, increasing approval rates and helping convert hesitant buyers into loyal customers.

The embedded finance platform works in real time to connect consumers with various financing options, allowing them to choose the most suitable terms without leaving the retailer’s site. This integration eliminates friction in the purchasing process, ensuring a seamless and stress-free experience for the merchant and the buyer.

Retailers who incorporate embedded lending solutions see a higher rate of completed sales, as customers appreciate the ease of financing and the range of options available. Omnichannel lending options, in-store or online, give consumers more control over their financial decisions, increasing customer loyalty and long-term growth.

Increase sales with in-store and e-commerce financing

In the furniture industry, where purchases represent significant financial commitments, flexible payment options like in-store financing and e-commerce financing can be a crucial differentiator. Many customers may hesitate to make large purchases due to financial constraints, but offering POS financing allows them to break up the payment into manageable installments. This not only makes the purchase more accessible but also encourages consumers to buy higher-value items.

For retailers, adopting embedded financing solutions helps to increase overall sales volume. By integrating these options into physical and digital stores, merchants can provide a consistent shopping experience across channels. According to recent data, businesses that offer POS financing platforms see a significant reduction in cart abandonment rates, especially for higher-priced products like furniture.

This omnichannel approach to financing expands the reach of a furniture store and enhances the customer journey, ensuring that whether a customer is shopping online or in-store, they have access to flexible payment options. As more retailers adopt embedded finance platforms, those who fail to do so risk losing out on a growing market of budget-conscious, tech-savvy consumers.

The power of embedded lending networks for furniture retailers

For furniture retailers looking to optimize their sales process, leveraging an embedded lending network can be transformative. This network connects retailers with multiple lenders, allowing them to offer personalized financing options to customers with various credit profiles. Merchants can significantly increase approval rates by providing tailored financing solutions, ensuring more customers can complete their purchases.

Using an embedded lending platform means financing options are seamlessly integrated into the checkout process without redirects or third-party interactions. Customers appreciate this convenience and are more likely to complete their purchase when they can select from several financing options that match their needs.

Retailers benefit from embedded lending because it removes traditional barriers to financing, such as lengthy approval processes and high rejection rates. This approach is efficient in the furniture market, where big-ticket items often require financing. Merchants that utilize an embedded finance platform position themselves as flexible, customer-friendly brands, which can ultimately lead to increased customer loyalty and higher lifetime value.

Omnichannel financing: Future-proofing furniture sales

As consumer preferences evolve, omnichannel financing will play an increasingly important role in future-proofing the furniture industry. Retailers who offer POS financing across multiple platforms—in-store, online, or through mobile channels—will have a distinct advantage in capturing a larger market share.

Today’s consumers expect flexibility not only in how they pay but also in where they shop. An embedded finance platform that supports omnichannel lending ensures that customers can access the same financing options no matter where they make their purchase. This seamless integration across channels helps build customer trust and increases the likelihood of higher purchase volumes.

Furniture retailers that adopt this approach are setting themselves up for success in a rapidly changing retail environment. By offering embedded finance solutions catering to the modern consumer’s desire for flexibility, merchants can attract new customers, improve conversion rates, and drive growth for years.

POS financing is no longer just a new trend; it’s becoming a standard payment method for many consumers. With evolving shopping behaviors, customers increasingly demand flexible payment options that help them plan and budget effectively. For merchants aiming to deliver a customer-centric experience, offering credit point-of-sale financing is essential to provide flexibility and choice at checkout.

5 Reasons to offer your consumers POS financing at checkout

1. Positive customer experience

One of the most overlooked advantages of a well-implemented POS financing platform is its boost to the customer experience. Offering personalized finance terms between 6 to 48 months that cater to unique financial needs enhances satisfaction. However, selecting a financing platform that delivers high approval rates is crucial. Single lenders typically approve only 35% of applicants, as they focus on consumers with prime credit. This leaves out a significant portion of customers. A multi-lender POS financing platform like ChargeAfter, with a network of global lenders, can approve up to 85% of applicants. Increasing the number of approved shoppers enhances their confidence in making more significant and frequent purchases. This leads to stronger long-term customer relationships.

2. Boost in sales

The checkout process often determines whether a sale is completed. Complex or lengthy checkouts contribute to high cart abandonment rates—81% of consumers abandon their carts online. POS financing simplifies this process by offering customers a fast and convenient way to access credit that isn’t tied to their credit cards. According to Forrester, companies offering POS financing have seen a 32% increase in sales. Merchants using multi-lender platforms like ChargeAfter report even higher sales boosts, up to 45%. Maximizing every sale opportunity by providing POS financing at checkout is a win for you and your customers.

3. Increase your average order value

Offering POS financing doesn’t just boost sales—it also increases your average order value. According to a Forrester study, merchants who offer point-of-sale financing see a 75% increase in the average purchase amount. Customers can spread payments over time, making higher-end purchases more affordable. For instance, 74% of U.S. cardholders view installment plans as a helpful budgeting tool, while 70% believe it reduces the stress of making large upfront payments. By offering your customers the opportunity to finance their purchases, you’re effectively increasing their buying power and enabling them to make larger purchases quickly.

4. Widen your customer base

A streamlined POS financing platform makes it easier for customers who may not qualify for traditional loans or prefer to use something other than credit cards. Debit cards are becoming increasingly popular, and recent reports show that credit card usage is at an all-time low. 63% of Millennials and Generation Zers don’t own a credit card, yet they will soon make up more than half of the consumer market. Point-of-sale financing appeals to these consumers by offering flexibility and avoiding large upfront payments. Moreover, research shows that 87% of Americans prefer to pay for big-ticket items in monthly installments. By advertising in-store financing options, you’ll attract a broader customer base, including those with varied credit backgrounds.

5. User-friendly experience

Providing a user-friendly and transparent checkout experience is critical to the success of any financing option. Platforms like ChargeAfter’s multi-lender POS financing platform integrate seamlessly into your website without redirecting customers to third-party sites. The financing option appears alongside traditional payment methods, and customers can complete their application in under a minute. By offering a quick and straightforward financing solution, you’ll improve customer satisfaction and loyalty, making it more likely that they’ll choose POS financing for future purchases.

The benefits of POS financing

The advantages of POS financing extend to everyone involved in the transaction. For price-conscious shoppers, it provides a comfortable middle ground between making a large upfront payment and spreading costs over time. For merchants, it offers a powerful tool to strengthen relationships with customers. Here are some additional benefits:

• Appeals to responsible shoppers: Many consumers are financially cautious, especially when making larger purchases. Offering point-of-sale financing aligns with their budgeting needs, allowing them to shop responsibly.
• Available across multiple channels: POS financing isn’t limited to just one type of transaction. You can offer it in-store, online, or even over the phone. This omnichannel lending approach ensures that customers can access flexible payment options no matter how they prefer to shop.

Will you jump on the next wave of credit?

The future of payment options is changing rapidly. As more consumers demand e-commerce financing and other embedded finance solutions, merchants who adapt to these trends will stay ahead of the competition. Offering embedded financing or integrating a white-label BNPL solution into your checkout process can significantly improve your overall sales, customer satisfaction, and business growth.

Why embedded lending networks are the future

One of the key trends shaping the future of payments is the rise of embedded lending networks. These networks allow merchants to offer financing options directly through their existing platforms, creating a seamless customer shopping experience. The embedded finance platform works behind the scenes to connect consumers with various lenders, ensuring they receive the best possible financing terms based on their credit profile. This increases approval rates and makes it easier for merchants to offer flexible payment options without needing to manage the financing process themselves.

By integrating embedded lending into your business, you’re offering your customers a smooth, frictionless experience. Whether through a white-label POS system, BNPL white-label solution, or a comprehensive POS financing platform, these tools are crucial for businesses that want to keep pace with the evolving expectations of modern consumers.

Expanding with omnichannel financing

Another significant benefit of POS lending is its flexibility across various sales channels. Offering omnichannel financing—whether online, in-store, or through mobile—ensures that your customers have access to financing options wherever they choose to shop. This adaptability helps create a consistent customer experience across all platforms, which is vital for building brand loyalty.

With embedded finance solutions becoming more integrated into the retail environment, businesses that embrace in-store financing alongside their e-commerce financing solutions will be better positioned to meet the needs of today’s consumers.

The importance of credit in POS financing

Credit plays a pivotal role in the success of POS financing strategies. As consumer demand for alternative financing options grows, offering credit solutions that cater to a wide range of credit profiles becomes essential. Traditional lenders may only approve customers with prime credit, but by leveraging a multi-lender embedded lending platform, merchants can approve customers with varying credit scores, widening their customer base and boosting sales.

A white-label BNPL solution allows merchants to offer flexible payment options under their brand while tapping into a network of lenders that cover different credit tiers. This helps customers with limited credit access financing and boosts overall approval rates, leading to more completed sales and higher customer satisfaction.

Preparing your business for the future of financing

The future of retail is all about offering seamless and flexible financing options at every point of the customer journey. Your business can stay ahead of the curve by integrating POS financing, whether through embedded lending platforms or omnichannel financing solutions. Offering your customers flexible payment options like in-store financing, BNPL white label, or e-commerce financing provides a competitive advantage in today’s retail landscape.

Now is the time to prepare your business for the next wave of consumer demand. Will you jump on the next wave of credit and take advantage of the numerous benefits of POS financing?

Competition among merchants has reached unprecedented levels. Many are exploring innovative strategies to build stronger and more personalized connections with their customers to stay ahead. These strategies include memberships, exclusive offers, coupons, or express shipping. The ultimate goal is always the same—boost sales. One of the simplest ways to achieve this is by offering consumers greater flexibility through point-of-sale (POS) financing options. Integrating consumer financing into your business opens the door to stronger customer relationships and more sales opportunities.

Changing attitudes toward credit cards

Consumer sentiment toward credit cards is shifting. A survey of over 1,000 consumers aged 22 to 44 revealed that nearly half felt dissatisfied with purchases tied to high credit card balances. The financial strain can be significant, with interest rates ranging from 18% to 29.9% and no set payoff date. In the same survey, 87% of respondents preferred paying for more significant purchases through monthly installments, appreciating the clear payment terms and defined payoff dates not tied to their credit cards.

The impact of credit card debt on sales

According to the Federal Reserve Bank of New York, credit card debt has soared to a record $800 billion. While credit cards remain popular, active accounts are lower than during the financial crisis, suggesting consumers increasingly avoid revolving debt. Millennials and Gen Z, in particular, are more cautious about spending, favoring debit cards and avoiding credit. These demographics, which will soon make up over 40% of the consumer landscape, are vital to consider as their preferences are likely to impact future sales. 63% of Millennials and Gen Z do not own credit cards, underscoring the need for alternative payment solutions.

The rise of alternative payment methods

As credit card use declines, consumers are actively seeking alternative payment methods. Research from Fifth Third Bancorp shows that Millennials and Gen Zers are increasingly comfortable taking out loans for everyday purchases or high-ticket items like laptops and vacations. Point-of-sale financing offers the perfect solution for merchants catering to these evolving consumer preferences.

Imagine being able to ask your customers questions like:

• What monthly payment are you comfortable with?
• How long do you want your financing terms to last?
• What kind of interest rate works for you?

With POS financing, merchants can offer personalized financing options that meet their customers’ needs right at checkout. This flexibility is a powerful tool that builds customer loyalty and drives higher sales.

Personalized payment options lead to increased sales

Merchants that incorporate point-of-sale financing into their business gain a clear competitive advantage by offering tailored payment solutions. Forrester reports a 32% increase in sales for companies that implement POS financing. The results are even more impressive for businesses using multi-lender platforms like ChargeAfter, with sales increasing by 45%.

The benefits for consumers are just as significant. POS financing provides clear, manageable terms, 0% interest options, and the assurance that consumers’ credit scores won’t be negatively affected as long as they make timely payments. Paying off a POS loan on time can positively impact their credit score. This win-win scenario creates a more attractive purchasing experience, leading to more frequent and significant transactions.

How POS financing affects margins and reduces cart abandonment

While the primary focus of POS financing is to drive sales, it also positively impacts other key business metrics, such as profit margins and cart abandonment rates. Offering consumers alternative payment options at checkout enhances their shopping experience and reduces the likelihood of them abandoning their cart due to financial concerns.

When customers have flexible, transparent financing choices, they are more likely to follow through with their purchase, resulting in higher conversion rates. Additionally, offering financing can help reduce acquisition costs by creating a more attractive value proposition, encouraging repeat business, and building long-term loyalty.

More payment options lead to more sales

Providing more payment options is all about creating more opportunities to generate sales. POS financing allows consumers to choose how they want to pay, making it easier to complete their purchases. The result? Increased sales, happier customers, and a more robust bottom line for your business.

Did you know that point-of-sale financing has been around for over 80 years? Throughout this time, technology has played a crucial role in helping checkout financing reach new levels of potential, improving the shopping experience for consumers. A more seamless purchasing process not only brings credit to customer loyalty but also boosts sales for businesses.

One of the earliest and still-used forms of point-of-sale financing is the layaway model. Popular in stores like Macy’s and Sears in the early to mid-1900s, this method was primarily used for household appliances and luxury items. The layaway concept allows a customer to place a deposit on an item and pick it up after making additional payments. However, unlike today’s financing options, customers couldn’t use their purchases immediately.

For example, consider Jill, who needed a new washer and dryer. The total cost of the set was $1,398, which she couldn’t pay upfront. With a layaway plan, Jill could put down $300 and pay off the remaining balance in biweekly payments over eight weeks. While effective, this method kept Jill from using her new appliances immediately. As credit cards gained popularity, layaway plans became less common due to the convenience of immediate purchases.

The rise of credit and private label cards

As credit cards became more accessible, new forms of point-of-sale financing emerged. Co-branded, private label, and core sales finance cards became popular tools for merchants and consumers. These cards offer various incentives and flexibility when financing large purchases

Co-branded cards, such as the Delta SkyMiles card or the Amazon Rewards Visa, are designed to build loyalty by offering rewards that can be redeemed at the issuing retailer and other stores. On the other hand, private label cards are limited to use at a specific retailer and focus on offering rewards and loyalty benefits. Meanwhile, core sales finance cards cater to financing big-ticket items in the jewelry, furniture, and electronics sectors.

While traditional credit cards were once the primary option for financing purchases, modern consumers now have more flexible alternatives through new point-of-sale financing platforms.

Credit’s role in modern point of sale financing

Credit has become an essential part of American consumer culture. The convenience of instantly purchasing goods and services with the swipe of a card has shaped how people shop. However, for mid- to high-ticket purchases, point-of-sale financing offers a more appealing option for many consumers

Customers can apply for financing at the point of sale with just a quick application, followed by instant approval. This provides personalized payment terms that suit their financial needs. Studies show that consumers, particularly Millennials and Gen Z, appreciate the flexibility of spreading payments over time. 52% of Gen Z and 60% of Millennials prefer alternative payment methods like consumer financing.

By offering point-of-sale financing, businesses allow customers to avoid hefty credit card interest rates and fees. This helps shoppers manage their finances more effectively while ensuring they immediately get the products they want.

Credit card interest vs point of sale financing

Credit card interest rates can range from 18% to 29.9%, creating a significant financial burden for consumers when they carry a balance. When people use more than 30-40% of their credit card limit, their credit score can start to decline, as credit bureaus see this as reliance on borrowed money rather than income.

Point-of-sale financing offers a much-needed alternative. With consumer financing, customers can avoid maxing out their credit cards and potentially improve their credit scores when timely payments are made. Instead of paying high interest, shoppers can opt for financing plans that offer fixed terms and lower rates.

Take Jill, for example. If she had used a multi-lender POS financing platform, she could have spread the cost of her washer and dryer over 6, 12, 18, or even 48 months with 0% APR. POS financing would have helped her budget and given her access to her purchase immediately—something layaway could not do.

How point of sale financing boosts sales

Offering point-of-sale financing benefits both consumers and businesses. Multi-lender consumer financing platforms can approve up to 85% of applicants in real-time, increasing sales by as much as 45%. Customers who have access to financing tend to spend more, adding additional items to their shopping carts. In Jill’s case, if she had been able to finance her washer and dryer through POS financing, she might have also bought a steamer and iron, increasing her total purchase value.

By providing flexible payment options, merchants can meet customer demands and create a more satisfying shopping experience. This increases the average order value and enhances customer loyalty, as shoppers appreciate the convenience and affordability of financing.

Adapting to the future of credit and consumer financing

As consumer expectations evolve, so does the way credit is offered at checkout. Shoppers are increasingly looking for flexible payment options to purchase items immediately without the burden of credit card debt. By incorporating point-of-sale financing into your business model, you can meet these demands and offer your customers the financial flexibility they want.

How credit is handled is changing, and businesses that adapt to these shifts will benefit from increased sales and customer satisfaction. Don’t miss out on the next wave of credit—make point-of-sale financing part of your strategy today.

The world of payments has been drastically evolving. There are a variety of consumer point-of-sale financing platforms and services that merchants and consumers can use. A distinct difference between platforms and providers is that a platform such as ChargeAfter connects merchants with various lenders to offer consumers personalized point-of-sale financing options at checkout across every credit type from multiple lender. On the other hand, single lenders tend to service and approve applicants with prime credit and very near-prime credit only. The differentiator between the services is vital as it affects the percentage of consumers approved or declined for financing. It also affects the financing terms available, and it will affect your conversion rates.

Let’s first dive into the realm of single lenders.

These types of lenders typically focus on “prime” credit applicants. This means they’re solely interested in consumers with good credit. The strategy of single lenders involves servicing consumers who are most likely to pay back their loans in the allotted time and those who pose the least risk to the lender. This strategy is excellent but can be limited to merchants and consumers. The problem with single lenders, and how they directly affect your business, is that they only approve prime and super-prime consumers and are declining around 70%~ of applications. Imagine what that would do to your cart abandonment rates. These companies only focus on the top 30% of consumers with pristine credit. As a merchant, whether you have physical store locations, an online presence, or both, only using a prime lender can have a negative impact on your conversion rates, considering only a small percentage of applicants are approved.  

Did you know cart abandonment rates are one of eCommerce merchants’ biggest hurdles? According to Business Insider, 81% of shoppers abandon their carts online. Now imagine a customer who wants to purchase items, goes through the entire checkout process, applies for point-of-sale financing, and then is denied because they do not have perfect credit. Imagine the negative impact that would have on your business.

Let’s now talk about multi-lender platforms.

Multi-lender point-of-sale financing platforms allow consumers to select tailored and personalized loans that fit their unique needs based on their personal financial requirements while allowing the merchant to approve up to 85% of all applications.

At checkout, the consumer fills out the financing application, consisting of only four short fields. The application goes through a “waterfall” of lenders to provide consumers with the best-personalized financing offers. First, the application is checked against prime lenders; if declined, the application moves down to the near-prime lenders. If the applicant is still declined, the application is moved down to the third tier – subprime lenders (“lease to own“) for a final decision. The entire process occurs on the merchant’s website without redirecting to sub-domains or third-party pages. The best part is that the consumer must only fill out one application on the merchant’s checkout page as part of the normal checkout process. Customers may have the option to finance products throughout 6, 12, 18, and even up to 48 months, with equal payments, all while receiving 0% APR as an option. ChargeAfter provides merchants with up to 85% approval rates while enabling merchants to enjoy up to 45% increases in their AOV. This process gives consumers a greater chance of receiving financing offers to purchase their everyday needs or high-value items.

Were you aware that 74% of US cardholders think installment plans are helpful for budgeting, while 70% think they help alleviate the stress of making a large purchase upfront?

As a merchant, providing point-of-sale financing from a multi-lender platform is a powerful tool. It will help your conversion rates and your business grow because you provide your customers with choice and flexibility in payment and return the power of financial choice to the consumers. POS financing is not restricted to eCommerce alone; consumer financing can also be incorporated in-store and for over-the-phone purchases. Point-of-sale financing will maximize the opportunity to grow your business further due to the stopping power you are putting in the hands of your consumers.

Explore how ChargeAfter patient financing is offered with a single application to multiple lenders.