If we’ve learnt anything from retail trends to-date, it’s that convenience matters – and it matters more every day. Consumers are increasingly making the most of online shopping, one-click checkouts, next day delivery, and any other service or function which gets them the products they want faster and with the least amount of effort.
Creating a convenient retail experience requires several contributing factors, and ensuring a no-fuss checkout full of various ways to pay is certainly at the top of the list. According to PPRO, 67% of UK consumers have abandoned an online retail site due to the payment process. 22% of these left because the process was too complicated, and 21% left because their preferred payment option wasn’t available.
So, what payment methods do consumers want to see at the checkout?
The new credit card
Consumers increasingly expect point-of-sale (POS) finance as a payment option, particularly for big ticket items which might previously have taken months to save for. By allowing consumers to spread the cost of their payment, purchases are instantly made far more affordable and accessible.
This option is so appealing that it will actually persuade a consumer to commit to a purchase that they were previously hemming and hawing over. According to the Citizens Financial Group, 76% of consumers are more likely to make a retail purchase if a payment plan backed by a “simple and seamless point-of-sale experience” is available. Coinciding with this, it also found that 66% of consumers feel their desire for credit cards is appeased, and they’d rather not have more just to make a large purchase.
Clearly, consumers are after more credit to make their purchases, but they don’t want any more credit cards.
Why are credit cards the less attractive option?
The mass move towards POS finance is partly due to the growing influence of the millennial market. Millennials are much less likely than older generations to have and use a credit card. Many don’t want to live off credit cards, but equally they can’t or don’t want to put off certain larger purchases, such as furniture and travel.
This generation also faces looming debts from huge student loans and are perhaps less likely to risk adding to it. However, this doesn’t mean they don’t want to use credit options at all. Rather, tech-driven and enhanced lending solutions have changed the market and diverted consumers from credit cards towards POS finance.
While consumers benefit from supportive payment plans, working with these innovative lenders also bodes well for retailers who are paid upon confirmation of product delivery – the customer pays the lender back over a course of months, not the retailer. This is a positive alternative considering the sizeable chunk that credit card programs typically take.
A lending process built with the consumer in mind
At DivideBuy, we know that choice and convenience reigns supreme. That’s why we created a lending model that was different to anything else available, one that prioritises the consumer and provides the fastest and most accessible experience.
We are the only lending technology provider on the market to actually lend money. This unique approach gives us the power to create exciting new tools and services that help retailers meet changing demands, and means we retain full control over acceptance rates. We are able to make more accurate assessments of a customer’s credit worthiness and offer a plan that is right for their financial situation.
Doing things differently means:
- Our application process is quick and convenient – no long forms for your customers to fill out or complicated small print
- We are always completely interest free
- Our payment plans are easy to understand with clear communication on what needs to be paid and when
- We offer deposit schemes or guarantor options to support an array of credit profiles
- Our customer service team is readily available for any customer or retailer queries
- Consumers and retailers have complete visibility over the lending process
- For the first time ever, retailers are able to offer an interest free checkout that connects them to their customers
What this means for you:
- More basket-to-sale conversions
- Larger average basket values
- Less basket abandonment
- Happy and loyal customers
If you’re considering introducing a LendTech solution to your checkout, reach out to us for a demo and see the benefits first-hand here.