Retail finance, in its most simple form, is consumer credit at checkout without the need for a credit card or an external lender. It’s the incorporation of a credit system into the customer journey. This can be done by integrating with a third-party, like ourselves, who specialises in POS finance.
Retail finance options include interest free credit, interest bearing loans or ‘buy now, pay later’ arrangements. Most customers tend to choose the option of interest free credit over interest bearing as they only ever pay the amount of the full purchase. Even in cases where customers are unable to/chose not to purchase online, there is evidence that POS finance can drive significant revenue uplift both in-store and over the telephone.
Retail finance tends to show the biggest gains when it comes to big ticket items such as sofa suites, education and electronics. For example, something with monthly instalments of £100 over the course of a year looks more affordable to a customer than a one-off payment of £1,200.
However, as a retailer, your first thought may be that working with such retailer finance lenders may cannibalise your margins. Research shows that conversion rates, upselling and customer loyalty all increase when the offer of interest free credit is available.
In recent years, POS finance has sustained a growth reaching £1.8 billion, equating to a year-on-year growth of 9%.
The likelihood is that providing retail finance to customers will give your sales a significant boost and give you the ability to steal potential customers from competitors who do not offer interest free credit. Interest free credit has accounted for 1.5% of all retail sales in the last year and is expected to grow to 2% in the coming year.
Unlike other retail finance providers, our concept is simple. As a partner of DivideBuy, you are not required to hold an FCA licence to offer retail finance to your customers. This is because our interest free credit option is up to 12 months with a maximum number of instalments also being 12 which does not require a retailer to hold authorisation, potentially saving you thousands.
Furthermore, the main retail finance providers include retailers, broker platforms, finance companies and eCommerce platforms. DivideBuy supports its retailers (without the need for a 3rd-party broker) as a fintech company, integrating with the most popular UK eCommerce platforms. Sounding like we tick all the boxes? That’s because we do.
Why DivideBuy
At DivideBuy, we provide retailer finance solutions across all sectors, from home furnishings to training and education. Rather than needing your customer to seek external finance options, our structure allows them to complete an order directly through the checkout. We’re entirely independent and are not reliant on brokers or 3rd party lenders. Our unique credit decision engine takes away the need for an underwriter and we are the sole lender of the credit we provide.
Using DivideBuy as your retailer finance option can increase your customer approval rates by up to 35%, removing their need to require external credit support to help complete a purchase.
Today’s consumers aren’t a patient crowd. With smart technology at hand, the world’s become used to getting what they want, when they want it. With our unique in-house technology, our retail finance option can help cater to this expectation; it’s a win-win, and the customer gets their item comfortable in the knowledge they are spreading the cost monthly.
Our industry-leading technology integrates seamlessly with your eCommerce software.
Customers choose DivideBuy’s interest free credit option at checkout and commit to paying in monthly instalments. We handle all application and credit processing.
When you deliver the goods, simply confirm the details in your portal and receive fast payment. As the credit provider, we bear the credit and fraud risk, not you.
Please note, a minimum turnover of £2.5M and minimum trading of 24 months is required to work with DivideBuy.
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Buying Retail Finance: Choosing your provider
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Financial promotions guidelines – How to advertise compliantly
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A buyer’s guide to retail finance – How to choose the right provider for your business
Offering retail finance options to customers can help increase sales and market share. Following this step-by-step guidance will help you make an informed decision that will benefit your business.
Interest free credit agreements provided by Zopa Embedded Finance Limited trading as DivideBuy are not regulated by the Financial Conduct Authority and do not fall under the jurisdiction of the Financial Ombudsman Service.
Zopa Embedded Finance Limited trading as Dividebuy is an appointed representative of Zopa Bank Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, and entered on the Financial Services Register (800542 & 993200).
Zopa Embedded Finance Limited (14602085) is incorporated in England & Wales and has its registered office at: First Floor, Brunswick Court, Brunswick Street, Newcastle-under-Lyme, ST5 1HH. VAT Number 439973733.
Copyright © Zopa Embedded Finance Limited 2023. All rights reserved
Ends 31st of December 2023
