There’s no doubt about it: giving your eCommerce customers the choice of retail finance offers them an alternative, flexible, modern payment option sure to increase the chances of a sale and reduce cart abandonment.
With a smaller initial payment and the ability to pay in instalments over several months, it’s the eCommerce trend sweeping the world – and is quickly becoming the preferred online payment option, particularly for younger generations.
According to research from Finder, 54% of millennials use buy now pay later (BNPL) methods as they look to be savvier with their money.
Providing alternative payment methods is therefore turning into something of a no-brainer for eCommerce businesses looking to boost sales. Research shows that 57% of online stores with an offering like this saw an increase in conversions since implementation.
Similar to credit card lenders, there are many providers of POS credit – all with varying criteria, credit limits and terms and conditions.
With there being nothing to stop companies from offering customers more than one option, it’s led to more and more retail businesses (including various sector giants) doing just that.
Here, we list five benefits your eCommerce site could gain from offering customers multiple retail finance options:
1. Provide more choice – and a better shopping experience
First and foremost, you are giving your customer more choice.
Think of it as you do with credit cards. Gone are the days when shops, retailers and eCommerce sites would offer just a single credit card payment option.
As well as the wide variety of card payment options on offer nowadays, shoppers also have electronic methods such as Apple and Google Pay to consider.
In the same way as demand for those payment types has risen substantially in the previous two decades, so too is the demand for multiple interest free finance options now growing as the payment method becomes ever more popular.
With more to choose from, you’ll create a more positive shopping experience for your customer, meaning an increased likelihood of a revisit to your site next time they are looking to buy.
2. Longer payment terms for customers
The second benefit – longer payment terms – will come in handy for customers looking to buy higher-priced items. For instance, one retail finance provider may offer a ‘standard’ three-month payment plan, which may seem reasonable at first.
However, when you take into account that the item may be £1,000, £2,000 or more, that’s still a lot of money to come out of a customer’s bank account each month.
Having another lender to choose from on your eCommerce site will cater to those individuals wanting smaller monthly repayments spread over a longer period of time.
At DivideBuy we offer customers the option to pay over 3-60 months. In turn, our retailers have experienced increased sales and reduced cart abandonment as well as pulling in different audiences in the process.
3. Boost your approval rates
Not all retail finance providers are the same when it comes to customer approval rates, and it’s often out of their control as the decision-making is handled by a third party.
For example, some providers may set relatively low credit limits for customers, making it less attractive particularly when they’re shopping for higher prices items. Other providers look at credit applications in a “one size fits all” manner, relying on a single credit check as their criteria rather than taking a holistic approach.
Similarly, not all providers give customers the option to do a soft credit check first. This gives customers an opportunity to check whether they’d be eligible for credit before applying, and doesn’t leave a record on their credit history.
At DivideBuy, we take on all the fraud and credit risk so you don’t have to. As responsible lenders, we make decisions based on a customer’s credit history, income and affordability, providing extended payment terms if needed. We also find that most customers do choose to make use of our soft credit check first, helping to maximise the number of applicants who are accepted and go on to complete their purchase.
4. Give the customer their preferred provider
An additional option only stands to complement your other payment methods at checkout.
What’s more, a customer may already have a preferred retail finance provider, such as DivideBuy, who they may have used before and therefore trust.
This also means they’re able to use that same account across multiple retailers, making it more convenient for them.
5. T&Cs and interest rates: offer your customer a finance provider whose solution is truly interest free
Remember, not all retail credit providers are truly interest free, so can end up costing customers more than the price of the item. Therefore, when you’re looking into a provider it’s important to clarify this, it can often be hidden in the small print. If your current lender doesn’t offer an interest free POS finance solution, be sure to consider taking on one that does.
At DivideBuy, our solution allows eCommerce sites to offer interest free and interest bearing credit to customers with no hidden fees or unexpected interest. We work in partnership with retailers to offer customer finance across all major eCommerce platforms and are entirely independent as retail loan providers.
By adding multiple retail finance providers to your site, you’re offering consumers choice and convenience – two major factors in achieving customer satisfaction and sales.