Benefits Of Lending To Consumers Through Point Of Sale Financing

Benefits Of Lending To Consumers Through Point Of Sale Financing

The world as we know it has changed and in these difficult financial times, people are becoming more aware of how and when their hard-earned money is spent. We live in an era where credit is king simply because prices have skyrocketed and interest rates are through the roof, yet wages remain the same. For those fortunate few, paying for high ticket items such as furniture is still possible, but for the rest, it simply does not fit into the budget. And for those who do have some form of credit available for these items, the fees and interest rates are unjustifiably high, putting them out of pocket and unsure of the next bill amount in the mail. 

This is a very real situation that many of us face and more customers are looking for flexible payment options that are transparent, easy to apply for, and offer more bang for their buck. This is where the importance of Point of Sale financing options comes into play.

Point Of Sale consumer financing, or buy now, pay later is a form of credit that is offered on check out. When customers choose this option, they are asked to fill out a quick application for a small loan. Their data is vetted against various lenders and should they meet the criteria, they are instantly approved for the loan. These microloans are broken down into affordable monthly payments without any hidden fees, so the customer always knows how much they are in for before accepting the terms. But it’s not just the customer who benefits from this online financing, you as the merchant also stand to gain when offering this line of credit.

Here are some of the benefits you as the merchant can enjoy with Point Of Sale financing from ChargeAfter:

New Customers

Even if you have a strong marketing campaign and have invested in an SEO strategy, if customers can’t afford your product, there is simply no way they can close the sale without credit options. Offering one line of credit in the form of in house or bank cards is just not cutting it anymore. Many consumers, especially millennials are hesitant to use credit cards because of the debt and costs associated with them. Instead, more are turning to buy, now pay options. 

Providing consumers with an easy way to assess credit without exorbitant fees will help your marketing efforts by driving more customers to your store. 

More Sales

The average cart abandonment rate across all industries is almost 70%, which means that approximately seven out of ten customers will not complete a transaction. There are many factors behind abandoned carts, however, the most prominent is the limited number of financing options available to shoppers. The solution to this issue is to eliminate certain pain points during the checkout and ensure a smooth experience. Shopping cart financing options like buy now, pay later allow customers to pay a small amount upfront and settle the rest with affordable monthly payments. 

By offering customers this option they are not as price-sensitive as they would be when they have to fork out the entire amount upfront. This also helps to increase the average order value as shoppers are more likely to go for the more expensive option for just a few more dollars per month. More transactions of a higher value means more profit for your business.

Fewer Risks

Investing in in house store credit is a capital intensive exercise that carries a lot of risks. By offering consumer financing like buy now, pay later, the risk of late payments or no payments doesn’t fall entirely on your shoulders as the merchant. Instead, you are allowing your customers to connect directly to lenders who provide the loan. This means that you do not need to worry about the terms of their agreement or take on all the risk in the event that a customer does not hold up their end of the bargain. 

By partnering with a reputable Point Of Sale financing like ChargeAfter you are able to grow your business, customer base, and sales without the hassles that come with traditional forms of credit!