What Is Point Of Sale Financing
One of the biggest challenges facing the modern consumer is to strike a balance between quality and price. A common observation in business is that quality and large products tend to be more expensive than their smaller and less inferior counterparts. In such instances, when a client finds that an item they want is beyond their financial means, a sale is lost.
Business owners have noted this phenomenon. That challenge notwithstanding, they want to increase sales, and still want to retain the client base. They, therefore, offer solutions to entice their consumers, even if they do not have enough money for it.
One of the most viable and sustainable solutions is point of sale financing.
POS financing (also known as consumer financing) is a consumer credit or instant loan option where the customer is given the option of taking a loan to buy a specific product, and then re-pay the loan with time. Customers can purchase and bundle multiple products to include in a single loan at checkout.
How Does it Work?
The normal consumer cycle applies. The online visitor identifies the business and the product of interest. If the consumer finds that he or she may not afford a certain product, there is a prompt labeled “point of sale financing option.” Upon selecting the option, then one can buy a product. This can be done online or in a brick and mortar business. The entire process takes only a few minutes, and if done online, less than a minute.
Features and Benefits of Point of Sale Financing
There are several benefits of investing in POS financing. To start with, any financing option appeals to more consumers thus increasing the bottom-line of the business. The modern consumer is sensitive to the business environment and wants to feel valued and appreciated. The more benefits that a business offers, the higher the probability of widening the client base. The use of point of sale financing leads to a higher rate of conversion.
Customers like being aware of the amount of debt they have, and these include small debts. They are aware that defaulting on debt, whether big or small, can have a great bearing on the credit rating. In the majority of the cases, consumer financing uses a digital app. Loans given through the digital platform are easy to track, therefore, consumers can make informed decisions.
On the side of the consumer, the customer will be able to purchase a product that he would otherwise forego. The process used to check up the credit score in POS financing is simple and not detailed, and therefore, customers can easily get the loan. As far as the purchases through point of sale financing are not incurring, a customer will be able to purchase a large product.
Consumers prefer the use of consumer financing because it is perceived to be more flexible and transparent compared to the use of credit cards. The credit process is demystified and the consumers can build the credit rating over time.
Cons of Point of Sale Financing
There is not much negative to say about POS financing.
Arguably, the biggest hurdle is finding a solutions provider with a system which is both capable & advanced, yet easy to integrate with your current eCommerce site.
ChargeAfter.com is the leading multi-lender consumer financing solutions provider which is easy to integrate too.
Conclusion
Contrary to what many business owners and consumers think, the use of point of sale financing is not a new consumer credit option. However, with the rise of e-commerce, the method is going to be more popular. POS financing has a lot of opportunities for both businesses and consumers. Overall, the credit space in the US will continue to evolve, and the consumer financing will be at the center of new and more innovative financing strategies.