Tag: Multi-lender platform

POS Financing: How Furniture Retailers Can Beat Declining Approval Rates

Posted on by chargeafterdev

As we enter the second half of 2023, economic uncertainty shows no signs of abating. Big-ticket items, like furniture, continue to be out of reach for many shoppers. This is exacerbated by lenders adjusting their underwriting strategies and approving fewer point-of-sale (POS) financing applications. Despite this challenging environment, furniture retailers can conquer declining financing approval rates and keep their customers happy. We explore how.    

Why Declining Approval Rates Continue to Matter

The current economic landscape, marked by rising inflation and increasing Merchant Discount Rates (MDRs), puts considerable financial strain on consumers. It leads to increased APRs, lower credit limits, and reduced purchasing power. At the same time,  individual lenders are approving fewer applications. This makes it harder for consumers to secure financing for their purchases.

Declining approval rates are likely to continue. Lenders are driven by risk management considerations. They tend to tighten their risk models and underwriting strategies in market instability. This cautious approach aims to protect lenders’ assets and minimize potential losses. As a result, lenders may approve fewer loans, making it harder for borrowers to get credit.

Additionally, regulatory measures play a crucial role in shaping lending practices. Regulators aim to protect consumers from over-borrowing and ensure transparency. They may introduce stricter guidelines and oversight for lenders. This regulatory environment often leads to a more conservative lending landscape. The result is decreasing approval rates, particularly for riskier loan products or borrowers.

How Declining Approval Rates Impact Furniture Buyers 

The decline in consumer finance approvals has clear consequences for retailers. It results in fewer sales and has a negative impact on the customer experience. Meanwhile, there is a shift occurring in shoppers’ credit profiles making the situation more complicated.

Consumers who were once approved by prime lenders at the start of 2022, now only qualify for near-prime loans; near-prime consumers are now subprime borrowers, making POS financing inaccessible for most of an already underserved population for POS financing. A survey by ChargeAfter found that only 17% of retailers offer subprime options.

Another audience to consider is B2B. Many furniture retailers are expanding to serve business clients. This way they tap into new market segments and diversify their revenue streams. Yet, point-of-sale financing for businesses often has approval rates below 15%.

The shift from a single-lender model to a multi-lender solution increases access to best-fit financing.

The Benefits of a Multi-Lender Approach

A multi-lender approach provides shoppers with financing choices. Lenders specialize in lending products usually designed for a specific credit profile. POS financing that meets the needs of the credit spectrum boosts the most important KPIs.

For example, retailers that use ChargeAfter’s platform to manage their POS financing enjoy up to 85% approval rates. ChargeAfter’s data shows that demand for POS financing increased by 62% in Q1 2023 compared to the same period the previous year, while approval rates for retailers using ChargeAfter went up by 14% despite lenders adjusting their credit boxes.

With approval rates from individual lenders fluctuating, adopting a multi-lender configuration is a critical strategy to ensure customers have consistent access to necessary funds in order to maintain and even increase approval rates.

How to Maximize Customer POS Financing Approval

In an unpredictable retail environment, maximizing customer point-of-sale financing approvals is vital. This is why retailers plan to expand their portfolio of lenders in 2023, according to a survey by ChargeAfter. 

Merchants who try to stitch multiple lenders into omnichannel checkouts run into problems. The process involves complex integrations that can take months to implement. When implemented, retailers then face the complicated challenge of managing multiple systems. This approach provides a poor customer experience, since customers who are declined by one lender have to restart the process or abandon their carts, in a moment of the customer journey when speed and convenience are crucial. A streamlined, efficient application process improves sales conversion and customer satisfaction.

Retailers are simplifying the financing process with a platform-first approach, which is becoming more popular as new technologies emerge.

ChargeAfter: The Platform-First Approach to Point-of-Sale Financing

Point-of-sale (POS) financing has rapidly become a critical aspect of the customer experience, impacting approval rates, average order value (AOV), and customer loyalty. ChargeAfter’s platform-first approach to POS financing provides a robust solution.

With ChargeAfter’s platform, retailers easily embed POS financing into omnichannel purchasing journeys. This connects their customers to a network of over 40 trusted lenders that cover the full credit spectrum using a waterfall approach. The platform introduces a more seamless and efficient process for customer financing, enabling merchants to seamlessly provide a wider choice of financing options.

A vital benefit of a platform-first approach is higher approval rates. More approved applications mean more completed sales, contributing directly to retailers’ revenue growth. Furniture retailers using ChargeAfter’s waterfall platform increased AOV  by 22% in the first quarter of the year in 2022 versus the same period in 2022, suggesting that consumers are turning towards financing to buy big-ticket purchases as prices rise.

A platform-first approach enhances the customer experience, offering a seamless and inclusive financing process. Shoppers enjoy less hassle, more flexibility, and financial empowerment, resulting in a more positive shopping experience and improving customer loyalty. It also provides access to data and analytics on customer financing behaviors. This enhances the understanding of customer preferences, trend(s) identification, and strategy fine-tuning. 

Jerome’s Furniture, a family-owned chain of discount furniture stores in Southern California, improved its financing offer with platform first approach. Since implementing ChargeAfter, the company has seen a 67% surge in financing adoption with consistently high approval rates. The strategy has been so successful that Jerome’s Furniture leverages its financing offer in its marketing campaigns. 

Investing in consumer education around alternative financing solutions could also prove beneficial. Customers will feel empowered and better equipped to navigate the financing landscape as they become more informed, increasing their purchasing confidence. Ultimately, a combination of innovative financial partnerships, consumer-centric policies, and education may bridge the gap between customer desire and purchase reality in these challenging times.

Moreover, a multi-lender platform simplifies retailers’ operational load. It makes it easy to manage disputes and chargebacks, and ensures compliance. ChargeAfter manages the complete post-sale financing cycle leaving merchants to focus on their core business.

In this economic climate, providing a choice of financing offers isn’t a service upgrade—it is a necessity. An exceptional embedded lending experience ensures the stability and longevity of retail businesses and safeguards consumer purchasing power. A multi-lender point-of-sale strategy has become essential for weathering economic uncertainty.

Conclusion

The platform-first approach to POS financing is a multifaceted solution helping retailers to optimize their financing processes. By employing a multi-lender platform like ChargeAfter, merchants can enhance their POS financing approval rates, AOV, and customer loyalty, while offering an unparalleled shopping experience.

 

Ready to get your financing right? Book a Demo

5 Common Point-of-Sale Financing Mistakes For Retailers to Avoid

Posted on by chargeafterdev

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.

Mistake 2: Ignoring the Omnichannel Experience

ChargeAfter 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. 

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.

 

Are you ready to get your financing right? Book a Demo

 

The Difference Between Buy Now, Pay Later (BNPL) and Consumer Financing Platforms

Posted on by chargeafterdev

The buy now, pay later option has become a widely favored payment method within consumer finance platforms, with over 50% of US consumers utilizing such a service.

What is Buy Now, Pay Later (BNPL)?

 

Buy now, pay later (BNPL) is an innovative payment option that enables customers to acquire products and services without paying the total upfront. Instead, they can instantly finance their purchases and repay them through fixed, interest-free installments over a set period—for instance, a $100 purchase in four equal installments of $25.

Widely used by a diverse range of businesses, particularly e-commerce retailers, BNPL services help boost conversion rates, increase average order values, and attract new customers. Companies that have integrated BNPL services have experienced up to a 30% incremental rise in sales volume. This payment alternative grants customers the convenience of immediate financing for their purchases paid through predetermined installments.

BNPL repayment illustration

As a merchant, you receive the complete payment for the item upfront, excluding any merchant fees, and are not responsible for handling the financing. Buy now, pay later providers undertake the responsibility of underwriting customers, managing installment plans, and collecting payments, allowing you to concentrate on expanding your business.

This guide provides an overview of buy now, pay later payment, and other financing options. It will educate you on their functionality and assist you in selecting a provider.

 

How do Buy-Now-Pay-Later Services Work?

  1. Customers can use BNPL to purchase products or services online or in-store by selecting the BNPL option via an app.
  2. Once a plan is selected, approval from the BNPL platform is obtained, initiating the payment cycle. The first payment is deducted at checkout, while the remaining installments are typically interest-free. Extra costs may be incurred for late payments.

bnpl-fintech-Customer Journey

Businesses obtain the entire payment upfront (excluding any merchant  fees) upon completing the transaction at checkout. Customers make their installments directly to the buy now, pay later provider, often without interest and with no extra fees, provided they pay on time.

 

Do Buy-Now-Pay-Later  Payment Methods Affect A Customer’s FICO Score (Credit Score)?

 

What Is FICO Score?

A FICO score is the number used to determine someone’s creditworthiness. Financial institutions and lenders use this as a guide to determine how much credit they can offer a borrower and at what interest rate. FICO scores can range from 300 to 850. The higher the number, the better. A FICO score is based on a few different factors:

FICO-Score-chart

When customers exercise caution by avoiding overspending and consistently making timely payments, the majority of buy now, pay later payment options should not substantially affect their credit scores.

How Buy-Now-Pay-Later Services Make Money?

Different FinTechs monetize their BNPL platform in different ways. Generally, providers derive income from the merchant, customer, or both. The fees for merchants vary depending on the provider but typically encompass an initial setup fee and a fixed charge for each transaction. Customer fees usually involve late fees incurred due to missed payments.

What Are The Benefits Of Buy-Now-Pay-Later Services?

Seamless checkout experiences are crucial for any business, especially when targeting e-commerce expansion. Customers anticipate smooth, personalized payment experiences that allow them the freedom to select their preferred payment method. Buy now, pay later payment options provide adaptability and ease to your customers, minimize fraud, and enhance conversion rates and average order values.

As the cost of living increases, customer demands for BNPL solutions will likely grow, making it a superior short-term installment payment option even for credit card holders.

Get Paid Upfront And Receive Protection From Repayment Risk And Fraud:

The merchant obtains the entire transaction amount upfront, without delay—regardless of the customer’s success in paying their installments. Consequently, buy now, pay later providers/lender-network assume all customer risks, protecting your business from fraud. In cases where a customer files a fraud-related dispute, the buy now, pay later provider bears the risk and any related expenses.

Extend Customer Reach:

Providing diverse payment methods enables you to establish a relevant and recognizable payment experience, attracting more customers. Buy now, pay later options appeal to younger consumers who frequently lack credit cards: 27% of millennials and Generation Z shoppers utilized buy now, pay later services in 2021*. Additionally, buy now, pay later services to possess well-established marketing channels, including shop directories and email marketing, which may present further opportunities for reaching new customers.

MorningConsult-BNPL-Use-by-Generation-Aug2021

* Marketingcharts.com – August 2021 | Data Source: Morning Consult

Enhanced Customer Experience:

Buy now, pay later payment solutions provide customers with a quicker, more accessible means of obtaining financing. Customers undergo a soft credit check (as opposed to a hard review associated with other financing methods), and there are no separate applications, application fees, or added processing time. Most providers feature easy-to-understand repayment plans and terms. Additionally, returning customers can enjoy a seamless checkout process, finalizing their payments in just a few clicks.

Increased Sales Conversion

Customers are more inclined to complete a purchase if they can pay over time. Buy now, pay later services help alleviate the sticker shock—making four interest-free payments of $50 appears less daunting than a single $200 credit card transaction with accumulating interest.

Increase The Value Of Sales

Buy now, pay later services eliminate the obstacle to making more substantial purchases by enabling customers to split the payment over time, accommodating their budget. For businesses offering lower-priced products, customers might be more inclined to buy extra items when they discover the option to spread the total cost over in installments.

Problems With Providing Buy-Now-Pay-Later

Buy now, pay later (BNPL) is a popular option for consumers who want to purchase without paying the total amount upfront. However, it has many limitations. It is only suitable for specific credit types. BNPL may be an option for those with good credit and a stable income, but it will decline those with lower credit scores, resulting in low approval rates.
Most BNPL loans range from $50 to $1000. For larger purchases, there is a need for other financing options.
Additionally, existing BNPL providers have a one-size-fits-all approach and don’t offer personalized lending. In today’s world – different people need different consumer financing options, and different consumers have unique financial situations; a customized approach can help them access suitable credit for their needs and budget. Without personalized lending options, consumers may be presented with unstable lending options, resulting in an inability to repay, high-interest charges, and potentially damaging their credit score.
The lack of personalized lending options in existing BNPL providers can also be bad for merchants. When consumers are given a one-size-fits-all financing option, it can lead to a higher rate of default and late payments.

Consumer Financing Platforms

While both consumer financing platforms and “buy now, pay later” (BNPL) solutions provide consumers with access to credit, there are some advantages that consumer financing platforms have over BNPL solutions. First, consumer financing platforms often offer more flexible repayment terms, allowing borrowers to choose a repayment period that suits their budget and financial situation. In contrast, BNPL platforms typically require repayment within a short timeframe, which can be challenging for some borrowers. Additionally, consumer financing platforms may offer lower interest rates and fees than BNPL platforms, saving borrowers money in the long run. Finally, consumer financing platforms may offer a broader range of loan options and loan amounts, making them a better choice for consumers who need more substantial financing for significant purchases. The main reason consumer financing platforms are more flexible and carry these benefits is that they connect to multiple lenders and are not the lender itself. Overall, while BNPL platforms can be convenient for smaller purchases, consumer financing platforms are often better for consumers looking for more effective and flexible financing options.

Buy Now, Pay Later Provider Comparison.

BNPL vs Consumer finance

 

Choosing the right buy now, pay later provider depends on the types of products you sell, their prices, and your customer base. When evaluating providers, consider the following:

Repayment terms: Buy now, pay later providers offer varying installment plans and term lengths, ranging from several weeks to multiple years. If your business has a high average order value, seek lenders that provide repayment over an extended period (like monthly installments over six months). Conversely, merchants with lower average order values may opt for fewer installments over a shorter duration, such as four installments over six weeks.

Credit limits: Each customer will have a unique spending limit based on their usage, credit, and repayment history. However, some buy now, pay later providers impose minimum and maximum credit limits. Assess your average order value and choose a provider that offers sufficient credit for customers to complete a purchase.

Customer location: Determine the markets in which you would like to provide buy now, pay later services, taking into account your customers’ locations. Often, this may involve offering multiple buy now, pay later providers to maximize your geographic coverage. With ChargeAfter’s multi-lender platform, this is unnecessary because the ChargeAfter platform connects you to the relevant lenders and services in one platform.

Affirm

Affirm BNPL range from 4 interest-free bi-weekly payments to extended installments for eligible customers of up to 36 months. The usual 0% APR loans range from 3,6, to 12 months.

Afterpay

Afterpay, known as Clearpay in the UK and the EU, enables customers to split payments into four interest-free bi-weekly installments or three interest-free monthly installments. With 20 million active users, it operates in Australia, Canada, France, New Zealand, Spain, the UK, and the US.

Klarna

Klarna Pay in Installments lets customers spread the cost of an online purchase over three or four interest-free payments. Klarna Pay Later in 30 days allows customers to complete a transaction and pay the total amount later, with no extra cost. Klarna Financing provides up to 36 months of credit for approved customers.

ChargeAfter

Multi-Lender Consumer Financing

Offering the power of choice, ChargeAfter provides a single application for personalized point-of-sale financing, guaranteeing approval and acceptance rates for any consumer financing option. ChargeAfter’s multi-lender platform caters to all credit types and currencies and connects consumers with suitable lenders for all e-commerce and in-store financing needs.

Consumer Finance, Not Only BNPL

Unlike other platforms, ChargeAfter allows for various types of consumer finance:

— Straight Revolve:
A type of credit that a borrower can continue to draw from and repay.

straight revolve Revolving-Credit-Facility

* wallstreetprep.com

— Deferred Interest (6/12/18/24 Months):
The interest is deferred during the promotional period. To avoid paying finance charges, the entire balance must be paid off, in full, at the end of the promotional period.

— Equal Pay:
Equal monthly payments are required during the promotional period. Interest does not accrue during the promotional period. This type of financing is designed to pay off promotional balance in full within the promotional period.

— Fixed Pay:
Fixed monthly payments are required during the promotional period. APR is assessed during the promotional period.

— B2B Financing

B2B financing can take many forms, including trade credit that can help businesses manage their cash flow, invest in new equipment or technology, and fund growth initiatives. B2B financing can benefit both the lender and the borrower. It can help businesses maintain strong relationships with their suppliers and customers while accessing the capital they need to succeed.

— LTO

Lease-to-own (LTO) is a financing option to lease a product or equipment with the option to buy it at the end of the lease term. This financing option is also available for businesses or merchants.

— Private Label Credit Cards

A retailer or brand issues private-label credit cards that can only be used to purchase at that specific retailer or brand. These credit cards may offer rewards, discounts, or other benefits to incentivize customers to use the card for purchases. Private-label credit cards can help retailers build brand loyalty and increase sales by providing customers with a convenient financing option and encouraging repeat purchases.

Supports All Platforms

Easily integrate point-of-sale financing options on your Magento, Shopify, WooCommerce, BigCommerce, hybris, custom platforms, and more with simple-to-connect extensions or basic JavaScript code.

Providing POS checkout financing for your website or physical store has always been more complex.

Credit spectrum

Credit spectrum refers to the consumer’s creditworthiness range, from those with excellent credit to those with poor credit. Lenders use credit scores and credit reports to determine a consumer’s creditworthiness, and this information is used to determine the interest rate and terms of a loan. The credit spectrum typically includes different categories, such as prime, near-prime, subprime, and deep subprime, each reflecting a different level of creditworthiness.


Post Sale Management

ChargeAfter offers all-around performance and transaction reporting through an intuitive dashboard. Access your transaction history, monitor live trades, and effortlessly handle settlements, up-selling, refunds, and partial credits with just a click of a button.

White-label Consumer Finance platforms

As a large retailer or established brand, ChargeAfter is dedicated to promoting your brand rather than ours. Tailor the entire point-of-sale checkout financing experience to align with your brand identity and provide customized Point of Sale finance offers that your customers will easily recognize.

Support

ChargeAfter prioritizes the success of our merchants by offering 24/7 support and assistance. Whether you require aid with processing financing settlements, custom reporting, or developing creative for your next buy now pay later financing campaign, we’re here to assist you in achieving your goals.

About ChargeAfter

ChargeAfter’s headquarters is in New York. The company’s investors comprise prominent entities such as The Phoenix, Citi Ventures, Banco Bradesco, VISA, MUFG, BBVA, Synchrony Financial, PICO Venture Partners, Propel Venture Partners, Plug and Play VC.

For more information & or to Schedule a Demo, visit https://chargeafter.com/contact-merchant/

 

ChargeAfter Expands Lender Network in Canada with Leading B2B BNPL Provider Tabit

Posted on by chargeafterdev

By adding more B2B lenders to its point-of-sale financing platform, ChargeAfter enables merchants in Canada to provide their business customers with additional B2B financing options

NEW YORK, April 4, 2023 ChargeAfter, the leading multi-lender point-of-sale financing platform announced today that it is expanding its network of lenders through a partnership with Canada’s leading B2B Buy Now Pay Later (BNPL) provider Tabit, powered by Merchant Growth. 

As a result of the partnership, ChargeAfter will provide merchants in Canada with more financing options for their business customers at the point of sale. Financing options are very limited for businesses, resulting in low approval rates. To help merchants provide a solution for their business customers, ChargeAfter partners with financing providers that specialize in serving businesses. 

Tabit is a B2B Buy-Now-Pay-Later solution powered by Merchant Growth. Merchant Growth was recently recognized as the fastest-growing B2B financing provider in Canada. Tabit’s integration into the platform means that merchants that use ChargeAfter to manage their point-of-sale financing can now provide their business customers with installment options from 30 days to 12 months.

Elias Beaino, EVP, Tabit commented “We are thrilled to announce our partnership with ChargeAfter, a leading multi-lender platform. Through this collaboration, Tabit is able to offer its innovative B2B BNPL solutions to even more merchants. We look forward to working closely with ChargeAfter to bring flexible payment options to businesses and help them grow and succeed.”  

Meidad Sharon, CEO, ChargeAfter commented “We are delighted to partner with Merchant Growth to add their Tabit’s B2B BNPL solution to ChargeAfter’s network of lenders in Canada. This new partnership is an important step in our B2B financing program expansion. Embedded point-of-sale financing is fast becoming the new standard for the modern customer journey and I am excited that ChargeAfter’s lending network is leading this change.”

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

ChargeAfter investors include Visa, Citi Ventures, Synchrony Financial, Banco Bradesco, MUFG, BBVA, PICO Venture Partners, Propel Venture Partners, The Phoenix, and Plug and Play VC. ChargeAfter is headquartered in New York and has a research and development center in Tel Aviv. For more information, visit https://chargeafter.com/about-us 

About Tabit
Tabit is a B2B Buy-Now-Pay-Later solution powered by Merchant Growth. Tabit was founded in 2021 with the purpose of bringing the consumer buying experience to B2B. Through decades of data and a deep understanding of the borrower and lender landscape, Tabit partners with B2B suppliers to provide small businesses with flexible payment options at point-of-sale and eliminates the risk and expense associated with in-house credit management. Learn more at: https://tabit.ai/   

 

About Merchant Growth
Merchant Growth is a leading Canadian financial technology company that specializes in small business financing. Over the past decade, Merchant Growth has supported Canadian businesses with hundreds of millions of dollars in growth financing. Using an innovative approach that includes the latest technology, complete transparency and thoughtful customer care, Merchant Growth is committed to helping make business financing easy to understand and accessible. To learn more, visit: www.merchantgrowth.com. 

For further information, please contact
Varda Bachrach, varda.bachrach@chargeafter.com
Investor Relations, ir@chargeafter.com 

Unleash the Power of Embedded Finance: Here Are Some Use Cases

Posted on by chargeafterdev

Introduction

Embedded finance is a growing trend in the finance industry that involves integrating financial services into non-financial customer journeys, and it is now becoming prevalent in both B2C and B2B contexts. Embedded finance options will eventually be the norm for B2C purchases, even for traditionally conducted offline transactions. This trend helps to increase customer engagement and loyalty. As this trend continues to grow, many industries are exploring various embedded finance use cases.

Embedded Finance Forecast

 

 

What is Embedded Finance?

Embedded finance allows non-financial companies to integrate financial services or products into their digital offerings, making it more convenient for customers to purchase products and streamlining business processes. This trend has also led to embedded fintech, wherein financial service platforms integrate into commercial or financial service platforms.

In short, an embedded finance ecosystem integrates the various spheres necessary to complete the entire cycle of a financed transaction.

For instance, when a retail customer makes a purchase (in-store or online) and opts to pay for the purchase in installments, three things need to exist;

The Seller – The merchant selling the product or services through the systems they employ. In this case their Point-Of-Sale system.
In embedded finance, this is the ‘Distributor’ or ‘Embedder.’
These are retailers, software companies, and marketplaces – that integrate financial services into their products to benefit their customers.

 

The Lender – providing finance for the product or services purchased in point #1 for a fee and/or interest, allowing the seller to sell a product with no financial risk.
However, sometimes the ‘lender’ role is also fulfilled by the seller as a second source of revenue by offering loans with interest.
This is the ‘Balance Sheet Provider’ or ‘Financial service provider’: Banks, fintech, and other financial institutions.

And

Technology Provider – configuring and integrating the systems between the seller system and the lender system to create and maintain a seamless transaction
The ‘Technology Provider’ or ‘embedded financing platforms‘ are both experts in the seller technologies and service design and well-versed in the regulations and intricacies of providing financial services. They help stitch the embedded finance ecosystem together. They look at the customer journey to provide processes that are simplified and personalized.

 

A real world example would be Point of Sales financing whereby:

  • The retailer would be the ‘Seller’ such as Lenovo

 

Lenovo consumer finance bnpl

 

  • The ‘Balance Sheet Provider’ would be a group of lenders bidding to offer the best consumer financing deal (long term installments financing)

 

  • The ‘Technology Provider’, such as ChargeAfter’, enables this transaction to occur by integrating and connecting ‘The seller’ with ‘the balance sheet provider’ in an automated manner, facilitating the transaction efficiently.

Lenovo consumer finance bnpl

 

 

Types of Embedded Finance

types of consumer finance - embedded finance

* Embedded finance, a multi-trillion dollar opportunity, Source: The rise of embedded finance, Dealroom and ABN AMRO Ventures, 2022

 

  • Embedded Lending and Buy Now Pay Later (BNPL)

 

BNPL is an example of embedded lending. It falls under Point of Sale financing (also known as POS financing). BNPL  is a lending option that allows customers to purchase goods or services and pay for them through short term installment loans. BNPL financing is usually offered by fintech companies.

Point-of-sale (POS) financing is an umbrella term that describes a variety of embedded lending  methods and products. These include BNPL but also pay over time for longer and bigger purchases, as well as 0% APR, revolving line of credit, lease-to-own, and more.

Point-of-sale loans like these are gaining popularity and have become essential in improving the user experience and driving customer loyalty through repeat purchases.
According to a 2022 article by The Ascent, 56% of consumers surveyed in 2021 have used a buy now, pay later service, this is up from 37% in July 2020*

* https://www.fool.com/the-ascent/research/buy-now-pay-later-statistics/

 

Increasingly, Point-of-sale loans are integrated with online e-commerce websites as well as in-store.
Well-known big retail brands such as Best Buy, Costco,, Target, Walmart, and countless others recognize the value in offering various embedded consumer finance options in their online channels and stores with an omnichannel experience. Many of these big brands opt to integrate with consumer financing platforms such as ChargeAfter instead of developing their own.

ChargeAfter’s omnichannel multi-lender platform is designed to support merchants by providing various financing options to consumers and businesses. The platform is pre-integrated with more than 30 leading lenders, enabling merchants to offer multiple financing options using a single application directly on their e-commerce website or retail location. The platform allows for a quick financing approval process, with up to 85% of financing approvals completed in less than three seconds.

ChargeAfter’s embedded  financing platform is designed to offer shoppers various financing options, regardless of their credit history. The platform offers 0% APR, open lines of credit, short and long-term installments, card installments, lease-to-own, and B2B financing options.

 

There are many examples of well-known retail brands that offer embedded financing and BNPL at the point of sale. Below are some examples:

Jerome’s Furniture:

showcases its financing options already at the homepage, allowing customers to prequalify for financing offers.

 

Jeromes consumer finance bnpl embedded finance

 

 

In addition they embed the financing offer within the PDP:

 

Jeromes consumer finance bnpl embedded finance

 

42photo.com

Presents a promo pop up with the financial offer – welcoming any customer to to choose business financing

 

42photo.com consumer finance bnpl embedded finance

embedding the Point of Sale financing as part of a seamless checkout process:

42photo.com consumer finance bnpl embedded finance

 

 

Digital Wallets Integrated into Mobile or Online Platforms

 

Digital wallets allow customers to store and use digital currency to make payments or transfers, manage their financial accounts and track their spending. They can also be linked to traditional bank accounts or credit cards, providing a seamless and convenient way to make transactions. Examples of digital wallets include Apple Pay and Google Wallet.

  • Some of Apple’s partners, to name but a few, include Best Buy, Disney, Dunkin Donuts, McDonald’s, Walgreens, Costco, Target, and Taco Bell.

 

Apple best buy consumer finance bnpl embedded finance

 

 

  • Google Pay also facilitates payment with Best Buy and other distributors.

 

Google pay bestbuy.com consumer finance embedded finance

 

  • Loyalty programs with digital or store credit rewardsLoyalty programs that offer rewards or cashback in the form of digital currency or store credit allow customers to earn and use rewards or cashback within the platform or service they are already using. For example, credit card companies or retailers may offer rewards or cashback through loyalty points redeemed for discounts or other benefits.A familiar example of a loyalty program is the Star Bucks Rewards.

 

starbucks.com rewards consumer finance embedded finance

 

Conclusion

Embedded finance has arrived and is making its way into the finance ecosystem. The trend will continue to grow throughout all verticals of business and service providers, and more industries will adapt to it. By integrating financial services or products into their platforms, merchants  can offer a more seamless customer experience while streamlining their back-end processes. With the advent of omnichannel lending, including POS financing and BNPL, the future of B2C and B2B financing at the point of sales looks bright.