What is Consumer Financing

More than just gadgets and groceries, people make even bigger purchases online, sometimes involving price points in the thousands of dollars. The problem with high-priced goods sold online is that only some purchases can be made outright by everyone. Buying a $5,000 piece of furniture is much different than checking out with $50 worth of houseware! Many consumers can either not make this sizable purchase outright or are rightfully reluctant because they are placing a high-dollar purchase on their credit card, which may not have the available line. This is where consumer financing steps in, providing much-needed relief.

Digital financing, in simplest terms

Point-of-sale financing is a quick solution to mid to high-dollar-value checkouts. Customers get their desired items without immediately racking a huge credit card bill. Instead, they’re instantly approved for financing applied directly to their cart. Rather than spending big bucks outright, they can repay their purchase in affordable installments over time.

The concept isn’t novel—financing has always existed for big-ticket items like appliances, furniture, jewelry, and more. What is new is instant financing, which is available through online checkout. As retailers of high-priced goods take their commerce online, checkout financing is the easiest way to bring financing options to customers.

Simplicity is key

One of the chief reasons consumer financing is making headway in e-commerce is its simplicity. In an age where more steps equal barriers to conversion, financing is integrated with other familiar checkout options like Apple Pay, Visa Checkout, and Google Pay. It’s not seen as a barrier—simply another payment option. About 25% of mid- to high-ticket item purchases are made through consumer financing at check out.

Financing at checkout also benefits from a streamlined credit application. Running a basic credit check is easier than ever, which means customers only need to provide their name, date of birth, phone number, email address, social security number, and monthly income figure. This takes about as much time as filling in credit card data for a regular purchase, making the process straightforward and not time-consuming. Credit approvals (or denials) are generated in seconds, which leads to faster checkout.

Flexible options with consumer financing

Consumer financing comes in various forms, increasing the likelihood of approval for most shoppers. Those with excellent credit may opt for higher payments at a lower interest rate for a shorter payback period. On the other hand, those with less-than-perfect credit may prefer more lenient terms. This flexibility is made possible by the diversity of lenders available, from traditional institutional lenders to ‘lease to own’ offers. This variety ensures that more people can borrow, leading to approval rates as high as 85% through a diverse lender network.

This variety and flexibility come from the diversity of lenders available. From traditional institutional lenders down to the “lease to own” offers, different risk tolerances and capital loans enable more people to borrow. Instead of 20-25% approval rates through single-point lenders like credit card conglomerates and other consumer financing providers found on many of the leading eCommerce sites today, approval rates as high as 85% are possible through a diverse lender network! The result is the widespread enabling of high-dollar eCommerce purchases.

Consumer financing is fueling eCommerce growth.

It’s abundantly clear that eCommerce is only growing. And, with high-value purchases starting to trend upward, it’s also clear that more straightforward financing options are in demand. Giving consumers an instant, secure way to finance their items at checkout will continue to fuel demand for these items and enable online purchases.

ChargeAfter is making it easier for customers to get the correct financing terms at checkout without the barriers of long-winded applications. Using a multi-lender network, we help online retailers enable quicker purchases of higher-value goods without the burden of a huge upfront purchase. We’re the intelligent solution to eCommerce growth for companies relying on convenient consumer financing!