Three common problems with offering your customers Point of Sale credit (and how to fix them)

Online purchases using buy now pay later credit solutions are growing at a rate of 39% a year, with more and more eCommerce retailers offering this as a convenient way to pay.

For retailers who use a Point of Sale (POS) credit solution, or are considering implementing one, there are several common concerns or problems that can crop up.

Some retailers feel that these issues negate the benefits of offering interest free credit in the first place, while others accept these problems as par for the course with all retail credit services without looking for a better solution.

In this article, we look at what these common issues are and how they can be overcome to ensure that your POS credit offering is beneficial for your business as well as your customers, and maximises the number of complete sales.

Problem One: Lots of customers are turned down for credit, meaning they don’t complete the sale and can be hesitant to shop on the site in the future

Not everyone who wants to buy now and pay later for goods is necessarily going to pass the credit or affordability checks required. If a customer tries to check-out using an interest free credit payment solution and is turned down, they may still decide to pay using another method in full and complete the purchase.

However, the chances are that they will at least rethink the purchase and may decide to come back later, but they may end up making the purchase elsewhere instead. The sale is lost at that point, and it can put people off from shopping with that particular online retailer again, even if their circumstances change in the future and they are more likely to be offered credit.

In order to lend responsibly, POS credit companies do need to ensure that the person applying for credit can afford to make the repayments, especially as they shoulder the risk of the credit, rather than the retailer doing so. Therefore, there will always be shoppers who aren’t considered suitable for borrowing. However, the way interest free credit companies assess the risk of lending can vary, and that can mean some lenders take different things into account when making a decision.

Solution One: Choose a POS credit solution that offers personalised lending decisions

DivideBuy have higher acceptance rates compared to many lenders because of our personalised lending decisions, meaning fewer barriers to affordable credit. We also offer a soft search facility on most of our partner retailers’ sites, which means shoppers can find out if they are likely to be accepted before making a full application.

As we are the credit provider as well as the creator of our checkout process, we can offer things that many third-party lenders cannot, which can have a real impact on credit acceptance. For example, a shopper that may be turned down for credit from another lender could be offered the option of paying a higher deposit with DivideBuy, so the risk is lowered but the customer still has access to credit for their order.

Another option can be for shoppers to have a guarantor for their borrowing with DivideBuy, which offers another way for them to access credit which might not be possible with other service providers.


Problem Two: Buy now, pay later means a complicated and long checkout process that increases cart abandonment

Everyone who’s shopped online has probably come across a checkout process that seems overly complicated. It’s no wonder that the number of online shopping carts that don’t make it through to a completed order is around 77%.  For retailers offering an interest free credit option to customers at the point of sale, the prospect of lengthening the checkout process to include a credit application, credit check and a wait for the results can be a real concern.

The last thing retailers want is for their chosen buy now, pay later service to undo any positive work they’ve already done on their conversion rate and in simplifying their checkout process.


Solution Two: Choose a POS credit provider that offers a streamlined checkout and quick lending decision

At DivideBuy, we are both the lender and the creators of our checkout process, which can be seamlessly integrated with all of the major eCommerce platforms, such as Shopify, Magento and WooCommerce. This unique position means we don’t need to go through or wait for a third-party application or service in order for shoppers to apply for credit and complete their online transaction. Credit applications can be completed quickly through our system and with an immediate credit decision, we help keep the entire checkout process as straightforward as possible.

This means our retail partners see sales conversion rates increase by an average of 70% when using DivideBuy.

Take a look at our success stories to see some of the eCommerce brands that have benefitted from DivideBuy and have seen increased conversions as a result.


Problem Three: If a customer returns their order, the buy now, pay later system falls down, and retailers receive negative customer feedback

While every retailer wants customers to love their products, the reality is that returns are inevitable. Offering customers a positive experience during this process can help maximise the chances of them making a future purchase.

When offering an interest free credit solution to shoppers, this adds a layer of complexity to returns because not only does the refund need to be given to the customer via the credit provider, it needs to link up with the retailer’s own systems to ensure everything works as it should and no-one is left out of pocket.

If things don’t function flawlessly during returns, it can result in unhappy customers, which can be damaging to a retailer’s reputation, especially if the complaint is made on social media or another public forum.


Solution Three: Choose a POS credit provider that has a refund solution built into their service

At DivideBuy, we understand all of the practical, technical and operational challenges of returns and refunds, which is why our solution enables you to refund any order in whole or part when required.

Processing refunds with DivideBuy is straightforward and we aim to process the refund within 24 hours of receiving confirmation from the retailer that the return has been accepted, with the customer receiving their refund in 10-14 days depending on their bank.

The process can vary slightly between eCommerce platforms, so we have created guides for those with Magento (1 and 2), Shopify and WooCommerce sites, along with custom integrations, to make things as simple as possible for retailers and help ensure customers have the hassle-free service they are looking for.

If you’d like to know more about how DivideBuy do things differently and can help your eCommerce business increase conversions with our interest free credit solution, our team would love to hear from you. Book a demo today.

Page last updated: 15 February 2022

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