There are lots of reasons why Retail Financing is becoming a more popular way of payment.
For retailers, the advantage of boosting sales numbers without lowering the price of the product, increase sales conversions, improves customer retention and encourages customer loyalty. Plus, by offering your own financial solutions, you cut costs by not having to pay payment providers like Klarna. As customers sign loans directly with the bank, the risk of not getting paid is also eliminated.
Banks see this as a great way to increase their reach, and their customer base by grabbing customers in the “spur of the moment”. It’s a unique opportunity to connect to customers at the final stage of their purchasing journey.
The advantages for customers are clear – they get a flexible payment option that allows them to get products. but pay at a more convenient time. There are many options for these loans: from “buy now – pay later”, interest-free credit, or interest-bearing loans – whatever is the best fit for the customer.
This system only works if it’s a smooth part of a customer’s journey – it needs to be convenient and accessible. Like the ability to apply for a loan in-store – with a single SMS – and get an approval in real-time. No more waiting in queues. No more slow responding times. And no more embarrassing rejections at the retailer’s counter.
If you have a technology platform that does all of those things, you’ve just created a win-win-win.