Benefits of Lending to Consumers Through Point of Sale Financing
Consumer financing is nothing new; customers have long used various forms of financing, but in recent years, it has evolved to new heights. The two most common forms of consumer financing are POS (Point of Sale) financing and BNPL lending (Buy Now Pay Later). The popularity of POS financing has led to the emergence of numerous Fintech businesses. Because they cannot use bank products and find it simpler to apply for POS financing, younger generations make up the bulk of consumers who use consumer finance.
What is Point-of-Sale Financing
Using a third-party lender, point of sale financing is a method by which retailers give customers an option to pay for a product both in-person and online. With predetermined interest rates and payment plans, it enables customers to spread out their purchases while still giving the retailer full payment, just as they would with a bank card. Before the epidemic, this payment option was on the rise, and like many other recent retail trends, it has only gained momentum in the wake of COVID-19. So why is POS financing so popular and what benefits does it have?
Benefits of POS Financing
There are a lot of advantages that POS financing carries, it is obvious as all the successful e-commerce stores have implemented those services from leader global lending platforms like ChargeAfter. We chose three main beneficial factors of Point of Sale financing:
1. Boosts Sales
The quick growth of revenue is one of the key advantages of POS financing and consumer financing in general. Vendors are able to grow their sales by over 33% when they offer point-of-sale financing. This works out great for them since they just pay an upfront fee for loan origination. Customers favor shops that accept split payments and have any kind of financing mechanism set up in their establishments. First of all, it enables consumers to purchase items even when they do not have enough money, and secondly, even when they do, purchasers prefer to divide payments since it gives them more control over their finances.
2. Better Conversion Rate
Better conversion rates are another advantage of POS financing. The majority of shoppers visit internet retailers to compare costs. According to studies, 68% of online shoppers abandon their shopping carts before checking out. This is due, in part, to customers’ desire for financing options to complete their transactions. People regularly compare costs for the goods or services they require, and if the retailers where they do so, have POS financing implemented in their establishment, that comparison may lead to a purchase.
3. Higher AOV (Average Order Value)
Every store’s AOV is rising as a result of consumer borrowing and POS financing. The article from UCFC (United Consumer Financial Services) demonstrates how POS financing may raise average order value and significantly affect any e-commerce business. When client is offered financing options from different financing platforms, they automatically pay more. By dividing the payment, we can buy more and spread the cost over a longer period of time. Therefore, incorporating POS financing capabilities from finance platforms can also boost purchase value. But it’s also crucial to pick the lending platform wisely.
Choosing the Financing Platform
Numerous new businesses have popped up on the market as a result of the quick growth of POS financing. While they all provide a variety of advantages to their customers, not all of them can deliver the best services and draw customers into your establishment. ChargeAfter’s market-leading financing platform has no fees and enjoys widespread customer and store trust. In addition to the fundamental benefit of the Waterfall financing system, which provides nearly 100% success on every application, its zero costs and personalized payment plans have made it popular on the market.
In conclusion, we can claim that implementing Point of Sale finance into your company will help you and grow it. So, you should think about using POS financing if you want to get into a huge market and be a sales leader.
ChargeAfter is a leading multi-lender platform for Buy Now pay later (BNPL) 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 BNPL lending to every shopper, by matching the most relevant lender to every client. Using the unique consumer financing 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.