Will you jump on the next wave of credit?
As you have probably noticed, POS financing is here, and it’s here to stay! It won’t be long until the concept of point of sale financing as an alternative payment option is simply referred to as a standard payment method. It’s an understatement to say the attitudes and shopping trends of consumers are changing. Consumers are demanding additional payment options with flexibility as it allows them to budget and plan for the future, financially. Point of sale financing is for merchants who want to deliver a customer-centric experience focused on flexibility and choice.
5 Reasons to Offer Your Consumers POS Financing at Checkout:
- Positive customer experience
The goodwill generated by an effective POS financing platform is often an ignored benefit. The fact that consumers are able to receive personalized finance terms between a period of 6 – 48 months, that meet their unique financial needs translates into a positive customer experience. When offering point of sale financing at checkout to your consumers, it is important to understand the approval rates being offered to your consumers by the point of sale financing lender or platform that you decide to work with. Single lenders only approve up to 35%~ of applicants for financing. The reason is that they are only focusing on consumers with prime credit, this means they’re rejecting 70%~ of consumers who apply for financing. A multi-lender point of sale financing platform like ChargeAfter is able to provide approval rates up to 85% for all applicants due to the network of global lenders that are offered. The more consumers that are approved for financing at checkout, the more confidence all your shoppers will have when purchasing goods. Shoppers will be checking out with more items more frequently. Point of sale financing enables you to nurture stronger, more long-term relationships with your consumers due to the accommodation you are offering.
- Boost in your sales
The checkout process can be strenuous for consumers, the more complex the process, the more likely consumers are to take items off their shopping cart or back down from the purchase entirely. One of the toughest hurdles eCommerce merchants face is cart abandonment rates, 81% of consumers abandon their carts online. Point of sale financing is an instant and convenient credit-granting process that is not associated with a consumer’s credit card. In fact, there has been an increase in short-term loans within the past 3-5 years. Forrester reports seeing a 32% increase in sales for companies that have offer POS financing to their consumers. When merchants offer point of sale financing from a multi-lender platform to their consumers, ChargeAfter reports seeing a 45% increase in overall sales. Maximize every sale opportunity by offering your customers the option to finance their purchases at checkout.
- Increase your average order value
Did you know 74% of US cardholders think installment plans are helpful for budgeting, and 70% of consumers think installments help alleviate the stress of making large purchases upfront? Point of sale financing provides your consumers with more time to pay for their purchases, whether they are every-day needs or high-quality goods. In fact, in the same Forrester study mentioned above, there was a 75% increase in average order value by companies that offer a point of sale financing to their consumers. Point of sale financing allows you to increase your customers’ buying power as it gives them more time to pay for their purchase at a rate they’re comfortable with.
- Widen your customer base
A streamlined point of sale financing platform can help remove the friction for buyers who struggle to qualify for personalized loans or who do not have the desire to apply for credit cards. Consumers have been favoring debit cards as a payment method, the Federal Reserve Bank of New York reported credit card usage has dropped and is at an all-time low. In fact, 63% of Millennials and Generation Zers do not own a single credit card and they will be making up more than half of the consumer landscape starting during the mid-2020s. Think about how the change in consumer attitudes will affect your business. Point of sale financing is appealing for far more reasons than avoiding a big charge upfront, American banker reported 87% of survey respondents expressed interest in paying for large purchases via monthly installments. All consumers are demanding flexibility in payments, make sure to advertise the alternative payment option you will be offering. This will help attract consumers with all credit backgrounds! Not everyone has perfect credit but it should not stop 70% of consumers without pristine credit from receiving financing options at the point of checkout.
A transparent user-friendly experience is necessary when it comes to integrating new processes into your business. ChargeAfter’s multi-lender point of sale financing platform is clear and easy to maneuver. When your customers are ready to checkout, they simply select the finance option which is offered alongside traditional payment methods. Then, the consumer continues to fill out the finance application. The entire process takes about 1 minute and happens on the merchant’s website, without any redirects to a subdomain. Finally, unique finance options appear and the consumer has the choice to pick the best one for them. Keeping borrowers happy may also inspire consumers among all age groups to select point of sale financing when checking out.
The benefits POS financing has to offer are valuable and favorable to all parties involved. Point of sale financing is a happy medium between price-minded shoppers and big-ticket purchases. When merchants meet consumers halfway, it enables a more powerful and long-lasting relationship. POS financing is a smart payment option to offer today’s cognizant and responsible shoppers. POS financing can be offered in-store, online or over the phone. Keeping up with consumer trends allows all merchants to adapt and better prepare for the future. Think about offering your consumers point of sale financing at checkout. Will you jump on the next wave of credit?