eCommerce and POS financing, a dynamic duo

The internet has a dynamic way of revolutionizing how we live, communicate, and shop. In the world of eCommerce, convenience is king. Consumers now have the power to purchase nearly anything they desire with just a few clicks or voice commands, bypassing the inconveniences of traditional in-store shopping.

Gone are the days of driving to stores, navigating traffic, and standing in long checkout lines for high-ticket items. Instead, eCommerce has empowered shoppers with a hassle-free experience, and retailers have responded by enhancing trust with favorable return and insurance policies. As eCommerce continues to grow, traditional in-store point-of-sale (POS) financing has also moved online, opening up new possibilities for retailers and consumers.

Why cart abandonment is a key challenge in eCommerce

While eCommerce offers convenience, cart abandonment remains a significant obstacle, with 81% of online shoppers abandoning their purchases before completing the checkout process. Understanding the causes behind this can help retailers address the issue:

• 28% of shoppers abandon their carts due to a complex checkout process.
• 19% leave because they don’t trust the website with their payment information.
• 8% abandon due to a lack of payment options.
• 4% skip checkout after their credit card is declined.

These numbers highlight the need for a seamless, user-friendly purchasing experience. The easier it is for consumers to navigate checkout, the more likely they are to complete their purchase. Retailers can reduce cart abandonment rates and boost conversions by simplifying the checkout process and offering secure payment options.

Dynamic consumer behavior- the appeal of POS financing

Today’s consumers are increasingly conscious of their time and finances. They understand the burden of credit card debt and the high interest rates associated with traditional payment methods. Once credit utilization exceeds 30-40%, credit scores decline, discouraging many shoppers from relying on credit cards.

A study by Citizens Financial Group found that 76% of consumers are more likely to purchase if offered simple, seamless POS financing options. Additionally, two-thirds of consumers have grown less interested in using credit cards, preferring installment loans that help them budget their purchases. The desire for flexible payment options has transformed how retailers offer financing, making POS financing a vital tool in capturing sales.

The benefits of POS financing for retailers

Retailers can modernize their payment systems by offering POS financing alongside traditional methods like credit cards. Moving away from outdated options like co-branded and private-label cards allows businesses to tap into the growing demand for funding consumer-friendly.

A Forrester study found that companies offering POS financing saw a 32% increase in average order value. When paired with multi-lender platforms boasting approval rates as high as 85%, POS financing can reduce cart abandonment and increase overall sales volume. Retailers who adopt this model have reported significant improvements across various industries, including automotive, furniture, travel, and entertainment. For example, merchants using ChargeAfter’s POS financing reported a 45% increase in sales.

How dynamic POS financing is changing retail

With the rapid adoption of digital tools and the rise of flexible payment options, POS financing has become a dynamic solution for retailers looking to meet the evolving needs of today’s consumers. Offering multiple financing options can reduce the barriers to making large purchases, resulting in higher conversion rates and customer satisfaction.