Tag: point of sale

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

 

Cash vs. Credit Card vs. Consumer Financing 2023 Trends

Posted on by chargeafterdev

With the advent of more sophisticated consumer financing technologies and services, consumers have more options to pay for goods and services, resulting in new spending trends. 

While credit cards are still a primary method of unsecured borrowing for US consumers, their use is declining, especially with the millennials and Gen-Z. Young Americans are also less likely to use cash; data from the Federal Reserve reveals that 35 to 44-year-olds only pay for 13% of their purchases in cash. 

According to McKinsey, the decline in credit card use has partly been attributed to the rise of buy now pay later (BNPL), which has been adopted by 37% of Gen-Z. As interest rates and prices rise, consumer financing at the point of sale rises. In the first quarter of 2023, ChargeAfter saw a 55% increase in point-of-sale (POS) financing applications. 

This article explores how consumers are shifting their payment habits and what this means for merchants.

Cash 

Since the early 2000s, there has been a global shift towards a cashless society, especially with the rise of mobile and crypto wallets. The US lags behind countries like the UK, Norway, China, and Canada in digital adoption. According to data from the Federal Reserve, 20% of transactions in the US are still made in cash. It’s worth noting that the average cash transaction is $22 compared to $112 for credit cards, indicating that it is primarily used for small transactions. In 2022, Pew Research reported that 41% of Americans said they make no purchases with cash in a typical week, compared to 24% in 2015.

cashless economy consumer financing

** PEW Research Centre

Credit Cards

Research by GlobalData in 2022 indicates 47% of Americans under 35 do not possess a credit card, compared to 39% in 2016. Overall, credit cards remain popular and accounted for 40% of US purchases in 2021, according to Statistica. In July 2023, the Federal Reserve published that 20% of US loans were rejected, suggesting that higher interest rates make it more difficult for Americans to borrow. The Fed raised interest rates seven times in 2022, and the average credit card interest rate in the US is almost 25%. For shoppers with a low credit score, the average APR is around 27%, meaning shoppers are looking for an alternative. 

POS Financing

As the technology to underwrite at the point of sale has been developed, multiple POS financing products have become available, mainly driven by fintech companies. These lenders offer diverse loans, including 0% APR, long and short-term instalments, revolving credit, B2B financing, lease-to-own, and BNPL. According to a survey by LendingTree, POS financing services rose by 12% in the United States between 2022 and 2023 and are popular across all age groups. This form of consumer financing allows customers to obtain instant financing at their moment of need, often providing better terms and greater flexibility than a credit card. Data from ChargeAfter shows that the amount shoppers spent using financing increased by 53% in the first quarter of 2023 compared to 2022 in the US.

The Future of Consumer Financing

The trend towards point-of-sale financing will continue as younger generations reject credit cards and consumers face high-interest rates. As financial technology continues to evolve, the potential of consumer financing is fast growing, suggesting an increasingly integrated and versatile financial landscape.

While cash is straightforward and carries no debt, it lacks the security and reward benefits of credit cards and is quickly replaced with tech-centered payment solutions. Credit cards offer flexibility but can lead to high-interest debt and are unpopular with young people. Consumer finance delivered through a POS financing platform that supports multiple lenders and is embedded into omnichannel customer journeys is fast being adopted by retailers to give their customers financing choices anywhere they shop. 

 

References

https://moneytransfers.com/news/2023/02/03/cash-vs-credit-card-spending-statistics

https://fortunly.com/statistics/cash-versus-credit-card-spending-statistics/ 

Over 20% Of U.S. Loans Rejected In Last Year—Hitting 5-Year High (forbes.com)

https://20831387.fs1.hubspotusercontent-na1.net/hubfs/20831387/e-books/The_High_Cost_Of_Low_Approval_Rates%20(6)%20(1).pdf 

https://moneyzine.com/personal-finance-resources/cash-vs-credit-card-spending-statistics/ 

https://www.pewresearch.org/short-reads/2022/10/05/more-americans-are-joining-the-cashless-economy/

Discover the Future of Consumer Financing at ChargeAfter’s Booth at Fintech Nexus New York!

Posted on by chargeafterdev

Join us at the Fintech Nexus New York event on May 10-11, 2023, as we explore the dynamic world of financial technology and its impact on the financial services industry. As a comprehensive media organization, Fintech Nexus delivers vital insights, networking opportunities, and motivation, bridging the gap between conventional finance and its future evolution.

We invite you to visit ChargeAfter‘s booth at this event to witness firsthand how we’re shaping the future of consumer financing. As part of the consumer lending track, ChargeAfter is hosting an insightful panel discussion in collaboration with Citi Bank on May 11th, titled “Will Banks Dominate the Future of Consumer Financing?”.

Take advantage of this opportunity to learn from industry leaders about the latest trends and innovations in consumer financing and how banks are positioned to take the lead.

The panel discussion will feature Terry O’Neil, Managing Director, Head of Embedded Commerce and Strategic Growth at Citi Bank, and Meidad Sharon, CEO of ChargeAfter. The conversation will be moderated by Jeffrey Tower, EVP Business Development from ChargeAfter, ensuring a lively and thought-provoking discussion.

Fintech Nexus New York promises to be an exciting event for professionals from the banking, fintech, and investment sectors, with over 5,000 attendees expected. Be part of this exceptional gathering, and remember to drop by ChargeAfter’s booth to expand your knowledge, forge new connections, and get inspired for the future of finance.

See you there!

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

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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.

3 Ways Retailers Combat The Changes In Demand For Consumer Financing

Posted on by chargeafterdev

The way retailers construct their marketing strategies and how customers shop  have all been disrupted by digital technology, which is the main reason why the world of retail is very different today than it was just five years ago. Consumers now use their smartphones to see product reviews and compare prices. In other words, it is now a lot simpler for consumers to make informed  decisions. The same is true for the financial component. The form of funding the buyer chooses has altered as a result of the changes in consumer financing over the past few years.

 

For example, the usage of BNPL lending has increased drastically after the pandemic hit, and the trend is still going as BNPL has become a kind of habit for consumers:

BNPL retail purchases in the US

SOURCE: CORNERSTONE ADVISORS

 

As shopping patterns continue to change, let’s examine how brands may develop and apply next-generation marketing tactics to enhance the customer experience with different consumer financing options in the upcoming years.

 

Why Is Consumer Financing Necessary

Retailers struggle to select the best consumer financing option due to the wide range of options available. As the usage of consumer financing is increasing every year, it is impossible to have a successful business without it.

So why is consumer financing so important?

To increase sales – you can offer customers lower prices, promotions or discounts on your  products, but it’s becoming more attractive to consumers to pay full price  if they have the option to finance their purchase and split the payment. Using lending services has become a part of our merchant offering, and consumer lives.

In addition, clients can split payments over time without incurring any costs thanks to current financing solutions. Because of this, BNPL lending and POS financing are among the most popular types of consumer finance available today. Many times, even though a person has sufficient funds on hand, they  still choose to employ a BNPL or installment loan, for instance. There is a simple reason behind it, wise use of financing options increases their purchasing power and allows consumers to have an extra amount in their accounts to feel secure and be ready for any emergencies.

Because of this, funding choices are now available for products and services like furniture. home improvement, vacation, autoparts, education, and many more, as an integral part of the shopping experience.

 

The Increased Popularity Of Omnichannel Consumer Lending

Consumer financing has become more popular overall during the past ten years. More consumers frequently use lending services to obtain the funds required for shopping or unexpected expenses. According to the statistics, consumers favor BNPL loans or point-of-sale financing solutions. Consumer financing choices give consumers freedom, and if they’re used appropriately, they make it much easier for them to manage their finances. However, online financing isn’t the only instrument that can help the buyer have a positive purchasing experience. Customers who prefer local shopping or need a product that was nearly hard to select or purchase online required retailers to adjust to their needs.

For instance, if a customer wants to purchase a new mattress or any other type of furniture, they may want to physically inspect it to ensure that they are making the appropriate decision. Therefore, when a customer went to a store after seeing the retailers’ pleasant financing options online, they had to have the same financing experience there. For situations like that, retailers offer in-store financing. To provide the buyer with the same comfortable shopping experience, several furniture stores, including Raymour & Flanigan, are now leveraging the POS financing and BNPL lending features via an omnichannel  multi-lender platform.

 

Point-Of-Sale Financing

POS financing has evolved into one of the key tools for consumers, making it seamless to access flexible  lending options, , and younger generations are also the main customers here.

POS financing users by age

Source: TransUnion US Consumer credit Database

 

The fact that customers receive the quickest and coziest method of financing is one of the reasons the service has become so well-liked. It usually only takes a few seconds to apply and receive the funds you require when reputable third parties are involved. It also allows customers to receive the best financing options: Installments, Revolving loan, BNPL or LTO (Lease-to-Own) are amongst the most popular examples of financing.

 

Potential Problems For Retailers

Since the economy has begun to expand again in recent months, retailers have faced difficulties on both the top and bottom lines as a result of some sales growth that has slowed and margins that have shrunk. In the future, the industry will probably have to contend with a more difficult growth environment in addition to higher expenses. In addition to the rising cost of goods, retailers must also deal with increased costs for everything: from production inputs to freight, fuel, and labor. Although inflation hasn’t yet had a significant effect on nominal consumer spending, we are starting to notice the first indications of a future slowdown. Despite unprecedented inflation in the first quarter of 2022, US consumers kept their wallets open. Considering that US consumers had almost $3.3 trillion more in funds than they did in 2019, the increase in consumer spending was maybe not unexpected. Many people didn’t hesitate to use their savings when credit constraints loosened. And it hasn’t only been the savers who have been spending; credit card debt is also starting to increase.

Consumer financing is undergoing the same changes, so retailers are currently juggling two issues at once. Although the increase in prices and inflation has forced customers to use additional financing choices, it has also made them more anxious and made it more difficult to decide whether to apply for extra loans. Consumers are increasingly attempting to use financing services with caution and only select the ones they trust the most.

To ensure that customers are receiving the services they desire when they visit a retail website or physical location, retailers must now pay close attention to consumer behavior and implement innovative consumer financing features.

If retailers take risky, thought-out actions, they can turn these difficulties into opportunities. Businesses that do very well during recessions often outperform their competitors over the ensuing ten years

 

3 Ways Retailers Can Combat The Demand For Consumer Financing

1.    Be On Every Channel

 

According to TIDIO statistics, various customers utilize POS financing and BNPL in-store and online in different ways. Online services are not preferred by all customers. Some customers prefer to purchase goods and services from brick and mortar  establishments.

US Consumers shopping stats

 

This once more demonstrates the need for consumer financing solutions like POS financing or BNPL lending across all channels. Whether it will be for customers who choose to shop in-person at the neighborhood store or for online users on websites or mobile applications.

.

2.    Offer Simple And Clear Financing

According to the findings of Citizens Point of Sale Survey, 76% of American consumers are more inclined to make a retail sale if a payment plan is supported by an easy and smooth point of sale experience. The survey found that 62% of respondents would like fixed monthly contracts with unambiguous payment terms, and a good understanding of how the sum will be paid off as the most crucial elements. Additionally, 66% of customers believe they already have sufficient credit cards and would rather avoid adding an additional credit card merely to make a large purchase. This suggests that customers seek a different option than applying for a new credit card to make a sizable purchase at a store. Retail brands can modernize their payment solutions by moving away from the store credit approach and adding simple financing options to their customers.

 

3.    Offer White-Labeled Consumer Financing

Consumers are flocking to private-brand products in the current market to combat inflation. Retailers should periodically reevaluate their category strategies in order to take advantage of this. Successful stores will strike a balance between fast-changing consumer tastes and pressures from individual inflation rates. This would need to reconsider their balance of national and private brands.

Consumers planning a major purchase viewed trust in the organization providing the financing and this is one of the main reasons they like branded lending platforms over independent FinTech firms. It demonstrates how retailer brands can profit from branded white-label financing solutions to attract more customers. As consumer financing has gained popularity, a wider range of independent businesses now provide these services.

Additionally, financing platforms like ChargeAfter, provide customizable white-label financing options. This allows the merchant to change the financing software however they see fit while still giving customers the financing options they need and demand.

 

Choosing The Right Consumer Financing Company For Your Store

Ready to provide your clients with immediate financing? Great! But which should you pick? It’s difficult to single out the top consumer financing providers because so many fintech firms provide BNPL products. Having said that, there are some qualities to consider while selecting a BNPL and consumer financing providers:

  • Positive customer experience: Businesses need to be able to deliver satisfying user experiences. For instance, ensure a smooth checkout experience would help prevent cart abandonment. Since over 80% of shoppers leave their carts empty before making a purchase, financing and BNPL ought to have superb integration to your customer journey. User-friendly features and no interruptions during checkout help decrease cart abandonment.

Card Abandonment reasons

  • Perfect payment plans: By offering a variety of payment options, retailers open up their products to more people, which can increase sales and brand loyalty. Customers and business owners alike can benefit from high flexibility. Any retailer can act as a lender thanks to financing platforms. A financing platform gives shoppers the freedom to choose their financing conditions based on sophisticated risk assessment models. Customers will be able to select from a variety of payment plans, without having to worry about not being approved.
  • Reduced risks: Flexibility and scalability are features that reputable consumer finance businesses can provide. You may increase sales, draw in new clients, and maintain existing ones by making it simple for people to finance the goods and services, but risk management should always be taken into account. Make sure to work with providers with low MDR (Merchant Discount Rate) and can provide the best interest rate for your customers. In addition, make sure the PoS financing solution of your choice has cutting-edge management including managing reconciliation, chargebacks and dispute resolution.
  • Helps you control Data: Lastly, reputable BNPL and PoS financing solutions ought to assist retailers in regaining control over consumer data in addition to streamlining payments. This would enable retailers to better understand what customers want, need, and like. Advanced financing solutions don’t just permit retailers to give clients financing options, but give the retailers the ability to safeguard user information, and build long-lasting relationships with customers.

 

Summary

In the end, we can say with certainty that consumer financing is still an evolving industry, and that brands must stay on top of emerging trends to ensure they offer the services that customers want. If not, retailers won’t be able to take full use of financing options. Therefore, we can conclude that both the retailers and the financing platform are involved in the process and that it is not a one-party job.

 

About ChargeAfter

ChargeAfter is a leading multi-lender platform for Consumer Financing. It connects businesses with the most reliable lenders, enabling them to offer customers the greatest financing solutions. With the best system of Waterfall Financing, ChargeAfter guarantees lending to every shopper, by matching the most relevant lender to every client. Using the unique consumer financing technology, ChargeAfter provides consumers with the best shopping experience. MUFG, VISA, Bradesco, BBVA, Synchrony, CITI Banks are among the investors of ChargeAfter.

How to get Embedded Finance Right

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The coronavirus epidemic in 2020 and 2021 forced firms to reevaluate and speed up their digitization initiatives more than ever. Years-long planned digitization efforts were finished in a matter of months. These modifications will remain as we move deeper into 2023.

The fintech industry, in particular how established companies involved finance on a different level by integrating financial processes into their whole company plan, is one of the most famous examples of digitalization. With an expected market price of above $138 billion in 2026, it’s obvious that the embedded finance age is here to stay and not simply a passing trend in finance.

 

What is Embedded Finance?

It can be difficult to grasp what this term actually means for individuals who are just getting familiar with the idea, as it is with any new ideas. The use of financial instruments or services by a non-financial provider, such as loan or payment processing, is known as embedded finance. An electrical retailer, for instance, might provide point-of-service insurance for items purchased in-store.

Consumer financial processes will be streamlined through embedded financing, making it simpler for customers to access the services they require when they do. In the past, customers might have needed to physically visit a bank branch to request credit in order to make a significant purchase. Thanks to embedded finance, they can now do both at the same time at the point of service. ChargeAfter, Amazon’s EMI financing choices, Klarna, and Applepay are some of the best-known examples of embedded finance.

The simplicity of embedded finance for consumers is one of its main advantages. Customers could be more likely to finish a purchase and enjoy customer pleasure, which is crucial for fostering brand loyalty, if pain points experienced by consumers are eliminated, such as the requirement to seek credit elsewhere. Because customers are more inclined to buy something and return to do so often, firms may have the possibility to boost profits.

But ease isn’t the only benefit of embedded finance. It also serves as a tool for a greater understanding of consumers, their requirements, and their purchasing patterns. Later, this information can be used to motivate more corporate growth.

 

Five types of Embedded Finance

1.Buy Now Pay Later (BNPL)

Modern consumers are opening a new line of credit thanks to buy-now, pay-later services. Consumers are empowered to shop differently when they have access to a greater variety of items that can be paid for overtime, whether they decide to spend more on a newborn’s travel system or a higher-end piece of home equipment. The consumer is given the option to divide the payment in order to avoid large transactions

2.Point-of-Sale Financing

Integrated lending, goes a step further with loans. Businesses looking to fund larger or more substantial purchases can integrate these financial instruments. To be able to lend responsibly, they frequently need more information, such as information on creditworthiness.

In contrast to BNPL lending, POS financing offers a suite of financing products such as B2B financing, Installments, revolving line of credit and even lease to own. Additionally, the application process is more pleasant and the application form is simpler. POS financing has grown in popularity with omnichannel and brick and mortar-retailers. For instance, Raymour and Flanigan, one of the major furniture merchants, recently began collaborating with ChargeAfter to equip its retail locations and online business with point-of-sale financing.

3. Embedded Insurance

Customers may wish to make certain that, should the worst occur, their money won’t be wasted while investing in a new good or service. Integrated insurance comes into play in this situation. Businesses are in a better position to provide insurance fast by integrating insurance finance technologies.

4.Trading and Investment

Users can connect with their physical bank to make investments in a way that suits their current financial condition and spending patterns thanks to embedded finance capabilities in investment applications. This is an illustration of how a different sort of financial services provider has used embedded finance.

5. Fintech-as-a-service

A fintech API called fintech-as-a-service enables businesses, including non-financial ones, to integrate financial functionality into their current goods, services, and programs.

The use of financial technology-as-a-service products in a whole is growing, from billing to customer acquisition and all in between.

 

Using Embedded Finance

Creating an embedded financial strategy that meets their customer demands can be the first step for businesses. This entails assessing your digital requirements and choosing the tools you want to integrate. Identifying your company’s objectives for its integrated finance initiative is the first stage in that process.

These could include initiatives like enhancing customer service, expanding an existing clientele, or starting a new business to cater to a particular target market or demand. For instance, if you want to enhance client loyalty, one strategy to consider is embedded payment.

For some customers, a BNPL model might increase access to products or services. You could find it simpler to establish yourself as a one-stop-shop concept with embedded finance. But before choosing the best option, you must first be aware of your needs.

 

Connect Lenders and Consumers

If your business is a retailer, connecting consumers with a variety of lenders can also help you. For this reason, ChargeAfter developed a platform wherein a network of global lenders are assigned to any point of sales, connecting them to customers who want to finance.

In other words, ChargeAfter’s multi-lender P2P platform connects the three parties in a way that is mutually beneficial.

 

About ChargeAfter

ChargeAfter is a leading multi-lender platform for Point of Sales Consumer Financing. It connects businesses with the most reliable lenders, enabling them to offer customers the greatest financing solutions. With the best system of Waterfall Financing, ChargeAfter guarantees personalized lending to every shopper, by matching the most relevant lender to every client. Using the unique network and technology, ChargeAfter provides all parties, merchants, lenders, and consumers, with the best shopping experience. Phoenix, MUFG, VISA, Bradesco, BBVA, Synchrony, PICO Partners, CITI, Propel Venture Partners, Plug and Play, and other companies worldwide are among the investors of ChargeAfter.

 

White-label BNPL: What is it?

Posted on by chargeafterdev

 

A consumer financing option called BNPL (Buy Now, Pay Later) allows customers to buy goods or services and spread out their payments over time according to a pre-set payment plan. BNPL services are mostly offered by lending and financing platforms at the point of sale.

When a product or service is created by one company and branded under the name of another, this is known as a white label. BNPL white label service is offered by the financing platform of ChargeAfter.

 

Benefits of BNPL White Label

The most effective POS lending platforms are made available to customers by merchants with a white labeled multi-lender, BNPL  platform. Merchants can boost their sales and build consumer trust by using ChargeAfter’s white label product  —  as well as get the best and most modern financing software solution for their stores, both online and off.  Additionally, ChargeAfter’s multi-lender network and consumer financing platform is available for banks, acquirers, and other financial institution to implement white label services and provide BNPL consumer financing to their merchants.

 

Customizable White Label Services

ChargeAfter’s turnkey, BNPL white label platform is customizable for banks, acquirers, financial institutions and merchants, meaning that they can brand and offer our BNPL consumer financing platform as their own.

The platform is made up of many parts that may be adjusted without requiring the development of a new solution. Want to learn more? Schedule a demo or reach out to us here.

 

Want to learn more? Reach out to us here.

Podcast summary with CEO Meidad Sharon: Powering BNPL platform with ChargeAfter

Posted on by chargeafterdev

Before ChargeAfter

 

During an interview with The Fintech BluePrint, Meidad Sharon, CEO of ChargeAfter, a top worldwide lending platform, discussed how ChargeAfter was founded and how the demand for consumer financing and BNPL drove him to build one of the best global financing platforms in the world.  Meidad discusses how at the time he worked at SafeCharge Nuvei, the financing and payment market was in desperate need of a smart and quick platform for consumer financing. The right and effective strategy was therefore required to create the firm that would serve as a link between retailers, customers, and lenders and assist them all to have the best possible shopping and business experiences.

What was the best course of action? The key concerns at the time, according to Meidad, were identifying which methods would be successful and figuring out how to apply them. Which customer segment should you target, and how can you convince them to buy your products? How to move your business on the proper path and what the next steps are. The most important step after strategizing is to observe how your plan performs in practice and which market segments it affects. The solutions and the secret to success are revealed in the first results.

 

Why was ChargeAfter necessary

 

Meidad Sharon discussed the inspiration behind one of the greatest BNPL Fintech companies in the globe during an interview. Speaking about his experiences while working at SafeCharge between 2010 and 2016, he described how businesses requested consumer financing options like loans and credits to increase sales and the number of customers they had. The prior numbers were incredibly low because only a small portion of customers who were browsing internet shops made any purchases.

“Only 3% of the consumers that are reaching the website end up buying”, said Meidad during the interview.

Due to the rapid expansion of e-commerce and online stores, Fintech businesses have to be established to meet the demands of both customers and business owners. There were two key causes behind that, as Meidad stated. The ability to create a global lending platform to provide consumer financing, and secure payments, because fraud was on the rise, and give all parties the fastest shopping experience was made possible by two factors: first, the innovators became the mainstream on the market, and second, the customers became more sophisticated and demanding.

Meidad responded that the payment is always the end of the tunnel in whatever type of business when asked why he picked the consumer financing and BNPL fields. Retailers, customers, and lenders are the three main parties that make up a global lending or financing platform. One of these parties constantly creates market opportunities, giving financing platforms the chance to expand while also assisting other businesses, from local to global ones, to achieve success. According to Meidad, the path was challenging but intriguing because it took time to develop the best platform, and using Visa and Mastercard’s features and services was essential to resolving issues and making the platform the market leader.

 

How has it started

 

Meidad also discussed the origins of the business and the first stages of success. ChargeAfter launched quickly to receive the first reviews since it combined financing expertise with experience working with various customers and merchant types. As he previously stated, the initial experience was quite exciting, the business was focused on the market and the requirements of retailers and customers. The next stage was to develop the product in light of feedback from the initial phases and expand the distribution of the service to new customers and lenders.

 

Where is ChargeAfter Now?

 

Meidad talked about the challenges ChargeAfter faced and the current difficulty they are working on. The majority of financing platforms were still rejecting 70 percent of applications. There were so many consumer financing choices, such as loans and installment payments, accessible on the market. There wasn’t a platform that would offer every customer the same service due to the various local restrictions that apply in various nations. As he noted, the majority of funding platforms just addressed specific aspects of problems, like prime consumers problems in the US, or near-prime credits in Canada, rather than the root causes.

“There are great lenders out there, but the market is disconnected, each lender is solving the part of the puzzle, but not all the puzzle.”, stated Meided Sharon during an interview.

Therefore, there was a critical need for a consumer financing platform that would link lenders and merchants so they could provide various forms of retail credit or Buy Now Pay Later services to the public, allowing ChargeAfter to expand its loan rate from 20 to 80 percent. It was crucial to be able to assist clients from various locations while ensuring that they received the consumer financing they required. These were the driving forces for the creation of ChargeAfter, which allowed him to use the greatest features of each lender, provide customers a far higher chance of approval in BNPL, and provide retailers with the best ways to boost sales and maximize AOV (Average Order Value).

This led to the creation of ChargeAfter, the market leader in consumer financing, which has reputable lenders and allows the financing platform to provide diverse services to retailers and customers so they may obtain BNPL loans with the payment plans of their choice. As Meidad has stated, he intends to raise the number of lenders to 70 by the end of this year and is already extremely near that goal.

The entire spectrum is currently covered by ChargeAfter. Different BNPL white label services, card installments, visa installments, and non-card choices are provided by lenders. working with major financial institutions like Citizens Bank or Wells Fargo, the US leasing companies, and offering business financing to businesses. Each customer can thus choose from offers that are relevant to them.

 

Economics of ChargeAfter

 

Meidad also discussed the business’s economics and the source of its income. He compared ChargeAfter’s actions to what Visa and MasterCard accomplished decades ago, when they connected all the banks in one place and enabled the use of a single card for a variety of services.  ChargeAfter is doing the same by linking lenders with the merchants. It is charging lenders platform fees based on transaction volume in order for them to use the financing platform of ChargeAfter and maintain connections with numerous merchants across the world.

 

How does it Work

 

ChargeAfter’s financing platform is simple to use for retailers thanks to integrated systems on websites. They only need to download it and use it in their stores. Additionally, it is simple for the customers because they just need to complete the application once, and the system will match them with the best lender. The platform’s responsibility is to offer them a safe and appropriate solution to all BNPL regulations and limitations.

To accommodate the growing number of customers, the system must also be modern and functioning effectively. To be secure and up to date, the corporation invests heavily in it and tests it every month.

 

Upcoming Trends

 

The CEO also discussed future trends in the industry. According to Maided, they can predict what would happen based on the statistics they have. There are two major market trends on the horizon. First, there is an increase in loan demand. To fulfill their needs and overcome obstacles, consumers will want more credit. In the future, more consumers will seek consumer finance since BNPL white label services will be increasingly necessary for the clients as the cost of goods and services rises daily.

Second, because lenders would have stricter loan requirements, the availability of credit will be difficult. The same thing occurred during the COVID-19 pandemic when loan approval was cut in half. According to Meidad, the same scenario will occur, and certain loan organizations will either exit the market or fail to adapt to the new trends.

ChargeAfter will play a crucial role in preserving the relationship between lenders and retailers so that consumers may still choose from a choice of BNPL options for their consumer credit. However, to qualify as prime clients and receive prime offers from the financing platform, customers must maintain the highest possible credit ratings.

Meidad Sharon concluded by saying that the ChargeAfter worldwide loan platform will continue to function as a connecting network to aid customers and retailers in getting through this time.

 

Want to learn more? Reach out to us here.