Single Lender vs. Multi-Lender Point of Sale Financing

Oct 28, 2019

The world of consumer point of sale financing has a distinct split between single lenders and multi-lenders. To the consumer, this distinction is almost impossible to spot. For retailers, it makes a big difference. Single vs. multi-lender platforms can have a huge impact on who gets approved for financing or not, and what terms are available, and what sales look like.

Single lenders

Single lender platforms typically focus on “prime” credit applicants. They’re after consumers with great to good credit and the most favorable variables working for them. This includes good credit history, high income and low or no existing debts.

These lenders — Affirm, Bread, and others—use specific credit underwriting terms to target prime consumers. Single lenders also act as banks and usually have one source of fund distribution. This means their risk is higher, which attributes to their focus on prime borrowers. Anyone not fitting the “prime” mold is usually denied, which means turning away roughly 70%~ of applicants to focus on the top 30%~.

There’s nothing wrong with this strategy for lenders—they’re targeting people most likely to pay back their loans! For (eCommerce) merchants, however, this impacts sales. Customers outside of the prime category may not qualify despite their clear ability to pay back their loans. Likewise, denied shoppers may abandon their cart altogether to shop elsewhere. Abandoned carts skyrocket, conversion rates fall and missed opportunities abound.


Multi-lenders (like ChargeAfter) use a network of financing options, funneled through a single user checkout experience. Customer data isn’t processed against a set of uniform terms targeted at prime applicants. Instead, it’s put through a “waterfall” of diverse banks, with a variety of financing options provided to the consumer at approval.

The waterfall method is simple. A consumer point of sale financing application is checked against the prime lenders for approval, and if declined, it moves down to near-prime options. From there, sub-prime options are explored and so on, all the way down to lease-to-own financing options, all in one single application with results back in under 2 seconds!

Because multiple bank-lenders are checked in the waterfall, different rates and terms are available to shoppers once approved, allowing them to pick the best-personalized offer for them at checkout.

ChargeAfter provides an up to 85% approval rate for applicants by enabling merchants to offer more financing options and allowing shoppers to receive and select the right option for them!

The effect on eCommerce

As mentioned, denying a shopper access to financing can have disastrous results for abandoned carts, conversions and even customer loyalty. Conversely, giving borrowers more options with flexible repayment terms can encourage confidence at checkout. It may even enable higher average order values (AOV) at checkout!

More people are shopping online than ever before. Big-ticket items are more available, too. As a result, it’s in the best interest of the online retailers to bring their customers diverse financing options to meet all credit types. Choosing a multi-lender platform means casting a broader net for interested shoppers and bringing in more sales. You’ll also turn away fewer potential borrowers with the ability to make good on their financing.

In an age where it’s easier to buy an armchair online than going to a physical furniture store, eCommerce stores need the diversity multi-lenders have to offer. Not everyone has pristine credit, but that shouldn’t disqualify 70+% of shoppers seeking consumer loans.

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About the author
Chris Lloyd
“ChargeAfter is amongst our top rung of partnerships, and they enable us to deliver consistent. The conversion uplifts ChargeAfter creates helps drive strong value for DXL Group and our customers.”