How Does Point Of Sale Consumer Financing Affect Consumer Behavior?
Today, people expect more from payment methods than ever before. Customers demand fast, convenient, and above all, secure transactions. People wish to interact and be viewed as an individual rather than another business transaction. Every person’s sales journey is different from the other.
That is why an individual’s experience with Point of Sale (POS) is crucial. It is more than just another payment transaction. In whatever form it may be, when a customer checks out their purchases, they get in contact with the seller.
Markets and businesses have mostly transitioned online. Due to this change, transactions had also developed to accommodate the new market environment. Before, people used to swipe their credit cards for every transaction in a physical store. Now, there are ACH payments. ACH payments serve as both electronic credit cards as well as debit transfers.
The bank account that enables a customer to get payments in either debit or credit card is called a merchant account. The merchant providers are given a set of regulations created by card associations that they must obey.
In order to have a secure transfer of sensitive information such as credit card information, there are payment gateway companies. The payment gateway serves as the middleman between the bank and the merchant.
The company that merchants hire to manage any form of credit card transactions is called a payment processor. These companies ensure security through anti-fraud measures which protect both merchants and customers.
When either a payment gateway or merchant creates a payment environment in order to meet the Payment Card Industry Data Security Standard (PCI DSS), it is called PCI compliance. The standard was created by the Payment Card Industry Security Standards Council to maintain security and decrease the possibility of fraud.
Giving Consumers What They Want With BNPL Consumer Financing
To make transactions easier and hassle-free, businesses offer many options for their clients to buy their products. If a client wishes to buy big-ticket items, businesses offer Consumer Financing. Consumer Financing allows the customers to either pay with their own money or borrow from either a lending company or a bank. When retailers offer this option at the point of sale financing, passive buyers are more open to buy and become active spenders.
Another option that is most popular among millennials and Gen Z is the Buy Now Pay Later (BNPL) option. The younger age group may not have the same liberty that their parents or the older generation may have due to things such as student loans and debt. Through BNPL, consumers have a more flexible financial option with their “pay in instalments” payment system. The younger generation gets to afford some of the things they wish to purchase. The goal of BNPL providers like ChargeAfter.com is to offer the maximum level of convenience to its clients by providing a payment option where they don’t have to get a credit card. Instead, with BNPL, consumers could buy expensive items immediately with a payment plan.
It is important for consumers to be able to see the amount of what they have to pay for. What’s more important is that they get to see how much they would just have to pay on a monthly basis. For example, if a consumer wishes to buy shoes with only a $100 budget, they wouldn’t be inclined to buy the shoes. But that would change if they get to see an instant cart financing option with a much affordable price. Customers are more inclined to make a purchase.
Other than affording an item, there are other factors that may affect the way people buy. There are some items in the market that may be embarrassing to purchase. These kinds of items may not be fast-moving in a physical store. However, with the growing trend of online market purchases, these items could easily be sold. What’s more, is that people are more inclined to buy because of the payment options available to them.
During the point of sale, there are a lot of factors that may affect a consumer’s behavior. But what remains as the most dominant factor in their buying capacity. Providing a certain level of concern and care when it comes to the merchant and consumer relationship goes a long way. Creating a relationship where a merchant does whatever he can to help a consumer buy her dream bag or purchase even some of her needs by giving them different payment options can greatly impact a business’s success rate.
