Why the Sudden Rush into Point of Sale Consumer Financing?

Anyone shopping for big-ticket items online lately has probably seen point-of-sale consumer financing options on retail websites. There have always been buttons for Visa, MasterCard, PayPal, Apple Pay, Google Wallet, and others. Now, consumer financing is right there next to them.

Consumer point-of-sale financing options may be a recent development, but they’re spurred by more significant trends that have been coming for a long time. Check out a few reasons why consumer checkout, point of sale financing, and credit are rapidly being implemented as an option at the checkout on eCommerce sites across the web.

Purchases are getting bigger.

Until recently, big-ticket items still required a trip to the store. Shoppers had too many concerns about online ordering. What happens if my Rolex is lost in the mail? What if package thieves nab my MacBook Pro while I’m at work? What if my big-screen TV arrives damaged?

As eCommerce has become increasingly a part of everyday life, these concerns have mostly dissipated. Most retailers offer favorable return policies and are willing to work with customers to resolve issues. Consumer confidence has never been higher, which has led more people to save themselves a trip to their local retailer and instead order online.

With a move towards making more significant purchases online, traditional in-store financing has also had to move online.

Consumers Are More Responsible with Financing

Millennials and Gen Z are much more attuned to the credit card debt burden than previous generations. They’ll avoid it at all costs, which means seeking alternative forms of financing for more expensive purchases. Unwillingness to pay high interest rates and the demand for more favorable terms have led to consumer financing as a mainstay online.

Younger shoppers are much more amenable to choosing repayment terms and accruing debt that’s less burdensome than traditional credit card debt. With fixed monthly payments and a precise payoff date, staying on top of financed purchases is easier.

Lending is getting easier.

We’ve come a long way from traditional finance options, a point-to-point exchange of funds by a single entity to a single borrower. Today, platforms like ChargeAfter harness entire network of lenders to provide consumers with various checkout and point-of-sale finance options. Regardless of the amount financed or the credit score of the consumer, there’s almost always one or more options for financing available.

Sourcing financing from multiple lenders also casts a broader net for those eligible for funding. Checkout financing isn’t just for prime applicants—thanks to a broad scope of lenders with unique terms, it can extend to near-prime and even sub-prime borrowers.

More than a fad, consumer financing is the future.

All these variables add up to one very clear point: Consumer and point-of-sale financing is here to stay. Purchases will continue to get bigger, consumers will (hopefully) stay cognizant of their buying habits, and lending will continue to get easier. As a result, financing will become more common for larger online purchases.

It’s a trend benefiting consumers and retailers alike! Consumers get the buying power they need with terms they feel confident in. Retailers see more sales as a result of more diverse financing options. It’s the way of the future in a world of eCommerce that’s growing daily.