embedded financing Archives

7 Reasons ChargeAfter Is The Best Consumer Financing Platform

Posted on Nov 15, 2023Nov 29, 2023 by Mark Denman

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

A seamless omnichannel financing experience
Expansive Network of Lenders
Easy integration and management
Unwavering Compliance and Security
Higher Approval Rates Equate to Increased Sales
Actionable Analytics and Data
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.

Safety net.

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.

US FinTech Awards 2023! – ChargeAfter Celebrates Triple Nominations

Posted on Aug 15, 2023Nov 29, 2023 by ChargeAfter

It’s a proud moment for us at ChargeAfter as we embrace our recognition as a trailblazer in embedded financing. We are thrilled to announce that we have secured nominations in not one, not two, but three categories at the esteemed US FinTech Awards 2023!

As pioneers in consumer financing, these nominations acknowledge our unwavering commitment to innovation and excellence. America’s burgeoning FinTech Awards have celebrated our impactful contributions in:

– BankingTech of the Year

– LendTech of the Year

– PaymentsTech of the Year

The judging panel reviewed hundreds of submissions. Being spotlighted amidst the nation’s best and brightest underscores our resolve to offer unparalleled consumer finance solutions, cementing ChargeAfter’s stature as an industry vanguard.

The winners will be announced at the ceremony in New York on 02 November 2023.

See the full The 2023 US FinTech Awards shortlist.

Big Brands Embracing Consumer Finance

Posted on Mar 27, 2023Nov 27, 2023 by chargeafterdev

Over the past few years, many retailers have concentrated on direct-to-consumer and e-commerce. As part of this – specific consideration has been given to consumer financing, and significant agreements have been made between consumer finance FinTech companies and big-brand companies such as Walmart, United Airlines, Amazon, Lenovo, and many others, even though these retailers already have well-established private label credit card programs.

Consumer appetite for consumer financing and BNPL drives merchant demand for point-of-sale financing.

* https://www.oberlo.com/statistics/buy-now-pay-later-us-users

Beyond surveys, historical growth statistics, or forecasts for rising popularity in consumer finance, the evidence lies with two simple metrics:

— How many companies include consumer financing at their point of sale, and
— Are any big brand retailers are embracing it

The fact is, consumer financing has always been a staple with big retailers.

The difference in recent times is that big brands recognize the benefits of partnering with innovative FinTechs, allowing them to concentrate on their core business while benefiting from new technologies as they are developed.

Previously, this was exclusive to merchants with the resources to integrate or develop point-of-sale finance options into their platform.

Innovation by FinTechs has accelerated the adoption of consumer finance as demand by merchants is fueled by consumers’ need for affordability in the face of the current and imminent challenging financial environment.

It is essential to understand that consumer finance does not exclusively mean Buy Now Pay Later (BNPL), although BNPL does fall under the umbrella of consumer finance.

Evolution of consumer finance

Consumer financing has evolved from credit cards and prime lending solutions often offered by traditional financial institutions such as banks to a technology-diverse fintech landscape with various financial service providers and platforms.

But what does this new ‘landscape’ offer, and how do we navigate it?

We look at how merchants use various consumer finance options and highlight their benefits.

Credit Card

The credit card option at checkout is widely known to us. It is the most prevalent payment method. Almost all banks and financial institutions provide many credit card types that are accepted as payment methods offering goods or services anywhere. One can purchase anything within a predetermined credit limit and pay later without impacting their monthly budget. A key advantage of using a credit card is converting the total purchase amount into affordable equated monthly installments (EMI), facilitating easy repayment over time. EMI conversions from credit card purchases have transformed the shopping experience significantly.

As popular as credit cards have been, consumers know their glaring disadvantages. The most infamous being high-interest charges. Further, the prime lender provides the loan (credit). i.e., the institution that issued the credit card reduces the credit limit by an amount equal to the bill amount converted into EMIs.

Buy Now, Pay Later

Single Lender BNPL Platform

BNPL (Buy Now, Pay Later) is unsecured consumer credit and an increasingly popular fintech-enabled payment option, most commonly offered on e-commerce platforms. The history of BNPL traces back to the installment plan – a way to pay for large purchases over time by spreading it over several smaller payments.

As a form of POS (point-of-sale) financing, credit originates directly at the time and point-of-sale, as opposed to a customer being required to secure credit from a lender ahead of their shopping experience.

Fintech companies have developed different flavors of BNPL. However, most are similar in that they have a single lender. Sometimes, as with PayPal, the lender is also the technology provider.

Studies have shown that BNPL increases retail sales. The reason is that some consumers may not have a credit card, prefer not to use credit cards, and many times look at BNPL as a better alternative to credit card installments, as BNPL offers an alternative to installment payments that is often with favorable repayment terms when compared to the use of credit cards.

Most, if not all, well-known big brands, such as Amazon, Walmart, and many more, have teamed up with BNPL FinTechs to expand their consumer financing options to increase sales while limiting risk. This strategy has proved to be successful.

Walmart

Walmart is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores. With over 10,000 stores in 27 countries, Walmart offers a wide range of products, including groceries, electronics, clothing, and home goods, at low prices to attract budget-conscious shoppers. The company is known for its efficient supply chain management. Walmart added Affirm as a BNPL for installments of 3,6 and 12 months.

Amazon

The largest retailer in the world and founded in 1994, Amazon is a multinational technology company. It specializes in e-commerce, cloud computing, digital streaming, and artificial intelligence.

In this example , Amazon has partnered with ZIP to offer short terms installments.

The problem with single-lender BNPL

However, although very convenient, single-lender BNPL platforms do not necessarily offer the consumer the best loan terms and are limited to BNPL only.

Customers must conform to single-lenders’ terms of service and credit score policy.

Imposing these terms of service may result in less than desired loan terms offered to the consumer or, even worse, a failed loan origination. Both scenarios heighten the probability of sale abandonment.

Big brands have recognized that consumers shop for the best deals, not only in products and services but also in costs and terms associated with financing their purchases.

For this reason, established merchants offer customers multiple payment options at checkout. Including multiple BNPL service providers and options. Most of which are single-lender platforms.

Bed Bath & Beyond, for instance, diversifies its consumer financing options to its customers by partnering with multiple BNPL financing providers.

Merchants have found that sale abandonment decreased because customers have more options for lending at the point-of-sale. While this is a good strategy by the merchants, it has many limitations. For one, it is still a limited short-term installment offering. Even when using several BNPLs, surveys found that almost 30% of merchants report that their consumer financing approval rates are less than 60%.

Furthermore – it creates a fragmented checkout experience. Sometimes, customers may still abandon their cart, feeling overwhelmed, unsure, and confused with the various options. Decision paralysis occurs because there is too much choice.

A study by SMARTASSISTANT found that 54% of consumers have stopped purchasing products from a brand or retailer website because choosing was too difficult.

The same is true for products & services and checkout payment options alike.

Multi-lender Consumer finance & BNPL platforms

As a means to offer the advantages of the different types of consumer finance options available and address their shortcomings, ChargeAfter developed a multi-lender consumer finance embedded lending platform.

Backed by over 40 lenders, in a single checkout financing option, merchants can offer their customers the best consumer loan at checkout, which is lightning fast and provides the best loan terms.

ChargeAfter’s platform and network finds the best loan suited for the customer and merchant with a streamlined and efficient process that feels indigenous to the merchants’ site and brand.

Unlike conventional consumer finance options and single-lender BNPL, surveys have shown that multi-lender consumer finance platforms achieve loan approvals of 80% or more.

ChargeAfter’s platform is seamlessly integrated throughout the merchants’ channels – online and in-store – to create an omnichannel experience that feels proprietary to the consumer. The benefit of omnichannel experience in itself adds value to the merchant.

As a solution that maximizes return through its obsession with the customer journey experience, ChargeAfter’s platform elevates the consumer experience, reduces cart abandonment, and increases return business.

Some examples of big brands using a multi-lender platform include:

Lenovo

Founded in 1984 and specializing in personal computers, smartphones, tablets, and other electronic devices, Lenovo is the world’s largest PC vendor by unit sales.

Lenovo is a multinational technology company that operates in over 60 countries.

Jerome’s
Jerome’s Furniture is a family-owned and operated retailer that has been serving Southern California for over 65 years.

About ChargeAfter

ChargeAfter is the leading multi-lender white-labeled consumer financing platform and lender network for global banks, financial institutions, and merchants. Powered by a data-driven decision engine and network of international lenders, ChargeAfter streamlines the distribution of credit into a single platform that merchants can implement rapidly online, in-store, and across any point of the loan.

ChargeAfter investors include The Phoenix, Citi Ventures, Banco Bradesco, Visa, MUFG, BBVA, Synchrony Financial, PICO Venture Partners, Propel Venture Partners, and Plug and Play VC. ChargeAfter is headquartered in New York.

For more information, visit https://chargeafter.com/about-us.

Boost Your Sales Growth: The Benefits of Ecommerce Financing

Posted on Mar 15, 2023Oct 18, 2023 by chargeafterdev

Consumer finance is not set to grow. It’s growing!

According to data from the Federal Reserve, (POS) Point-of-sale financing makes up approximately 10% of the total unsecured lending balances in the United States. In 2020, credit card balances amounted to around $750 billion, while POS balances totaled about $100 billion. Nevertheless, POS financing is expanding more rapidly than any other category of unsecured lending. It is set to grow at a compound annual growth rate (CAGR) of 20% for the 5 years preceding 2024. (I.e. financial years 2020 up to and including 2024)

Similarly, according to McKinsey Consumer Lending Pools, the same trend is can be seen internationally with POS financing making up 11%

Prudence Research has also shown, how BNPL, a financial instrument for short term installment loans, falling within the POS Finance umbrella, has grown and how it is forecasted to grow dramatically in the coming years.

For instance, the Buy Now Pay Later market size is forecasted to grow to a staggering 3.2 Trillion dollars by 2030.

Financing can expand the customer base for various purchases, including appliances, electronics, furniture, home improvement projects, and services like elective medical procedures and dental equipment and procedures. Offering financing options can boost sales for any seller, whether in a brick-and-mortar store, online, or through a call center, and cater to all consumer types.

Buying a product or service that costs between $1,000 and $10,000 is more complex than making a $50 purchase by swiping your credit card. Businesses need to make an effort to attract a broader range of consumers.

Through embedded finance, consumer financing has expanded beyond buy now, pay later and adopted long-term installment payment, 0% APR, revolving lines of credit, and more, to offer consumers flexible payment options.

Industry analysis found how consumer financing increases merchant sales. For instance:

According to The Inaugural Citizens Point of Sale Survey by Citizens Financial Group, the most notable finding is that 76% of consumers are more likely to make big-ticket sales when given the option of consumer financing, such as BNPL or other payment plan options.Of those surveyed, 66% want consumer finance alternatives to credit cards.The survey revealed that consumers would prefer non-credit-card consumer financing with fixed monthly plans, clear payment terms, and a clear understanding of how the amount will be paid off as the most important factors when considering a large purchase.

Comparably, a study by Futurepay.com reports that 56% of shoppers are more inclined to purchase a high-priced item online if financing options are available. This percentage increases to 73% for frequent online shoppers. These statistics are very close to findings by the Citizens Financial Group.
A recent FREE retailer insights survey by ChargeAfter indicates that from a retailer’s perspective, 85% of retailers expect year-on-year growth in consumer financing.

Consumer Finance: Higher Value, More Sales

Merchants selling higher ticket items who offer consumer finance options achieve more sales than merchants without consumer financing options.

‘The Big Ticket: What’s stopping Shoppers’ (big-ticket survey) published its findings.

According to them, financing alternatives stimulate high-value purchases. Over two-thirds of shoppers (68%) and 79% of daily shoppers would be more inclined to purchase a high-priced item if they could divide the cost into smaller payments. For high-priced items under $1,000, almost half of all shoppers (47%) prefer alternative financing over a credit card to complete the transaction. Even at a price as low as $200, 15% of shoppers were willing to switch away from a credit card.

**

Similarly, ChargeAfters’ Retailer survey released in 2023, from a retailers’ perspective, states that merchants recognize that financing options drive big-ticket purchases.

The number of BNPLs merchants offered to customers is not affected by the retailers Average Order Value (AOV). However, other POS financing options vary significantly depending on the AOV of the business. When the AOV is less than $500, companies typically offer 2.5 different POS financing options. However, when the retailer AOV exceeds $500, this number increases to 3.5 different POS financing options. As their AOV increases, merchants seek to diversify their payment options to meet customer demands. There is no one-size-fits-all solution regarding financing options, particularly with a substantial AOV. Offering a limited BNPL of pay in four or six installments is insufficient as customers require more flexibility and choice.

Financing options by Average Order Value (AOV)

Fintech companies at the forefront of consumer finance innovation offer embedded financing & lending technologies making it easier for merchants to integrate omnichannel consumer financing solutions.
Embedded finance solutions that integrate easily, such as ChargeAfters’ multi-lender platform, allows merchants to offer their customers quick, convenient, and personalized financing options.

Customers connect to a wide choice of financial products and lenders in a single application, resulting in an 85% approval rate. Merchants increase sales by offering consumer financing and installment payments on sales where the same customers would typically walk away from the sale.

Reduce Cart Abandonment with Consumer Finance

The Big Ticket: What’s stopping Shoppers survey found that 66% of shoppers abandon their carts after adding an item to their shopping cart.
72% of this abandonment was due to the items being too expensive, and 16% because there were no payment options.

Another Research conducted by beymard.com in 2022 shows that site trust (18%), complicated checkout process (17%), inability to calculate total order cost upfront (16%), not enough payment options (9%) and. Credit card declines (4%) are the main reasons for abandonment. These statistics can be significantly improved with the correct embedded finance technology.

With an embedded lending platform like that of ChargeAfter, merchants can increase sales by decreasing cart abandonment.

Conclusion

Reducing cart abandonment is one of the most significant benefits of offering consumer financing and installment payments in e-commerce stores. Many customers abandon their carts because they need help to afford the full price of an item at the time of purchase. However, by offering financing options, merchants can make sales more affordable and accessible, reducing the likelihood of cart abandonment and increasing the chances of a sale.

In addition to reducing cart abandonment, offering financing options can increase customer loyalty and repeat business. Customers who take advantage of financing options are more likely to return to the same merchant for future purchases, as they have established a relationship and trust with the merchant through the financing process.

Offering financing options can help merchants reach a wider audience of potential customers. Many consumers who may not have been able to afford high-ticket items in the past may now be able to do so with financing options, opening up a whole new market for the merchant.

Finally, offering financing options can help merchants stand out from the competition and differentiate themselves in the crowded e-commerce marketplace. By providing financing options, merchants can provide a more comprehensive and customer-centric shopping experience that distinguishes them from other retailers.