November 28, 2022

What Benefits Does POS Financing Provide to Online and Offline Businesses?

point of sales financing

To expand their respective businesses, various merchants look to offer payment options that attract more customers. One such method adopted by various businesses is POS financing.

POS stands for point-of-sale financing.

When a business provides its consumers a financing solution at the time of purchase, it helps them acquire the goods or services. Open-loop and closed-loop credit cards, and installment loans are all examples of the point of sales financing.



Consumer-friendly, inexpensive point of sale, point of sales financing allows customers to purchase mid to high-ticket products without taking the help of the bank in the short term. Point of sales loans is getting more popular as a result of modern customers’ unique relationship with credit.

The option of point-of-sale financing has been around for a long time and is commonly used for major purchases like furniture and auto loans. However, thanks to technological advancements, point of sales financing has grown in recent years, with installment loan alternatives available immediately online and with explicit repayment conditions provided before the loan is taken out. These advancements have also made it way easier for various types of retailers

Implementing Point of Sale in Your Business

For online and offline business owners who want to add flexible financing to their products. A point of sales finance option is the best choice to increase their pool of prospective customers.

Point of sale is very easy to implement in your business. The following steps show how you can implement point of sale in your business.



  • Make certain that your company requires consumer financing. Are clients interested in things that they won’t be able to afford at full price right away? Or are there clients who add products to their cart and then later do not purchase them because of the price?
  • Once you have determined which point of sale lending platform is best for your business, make sure to inform your consumers that consumer credit is available.
  • Customers should have the option to apply for financing in person, online, and by mobile device.
  • Customers should be able to determine easily whether or not they are qualified for a point of sale loan fairly instantly.
  • Your consumer gets the merchandise right away, and you get paid right away. The lending company will present the consumer with a repayment schedule.
  • For setting up and operating their point of sale programs, several of the Point of sale finance providers demand hefty fees from business owners. For the business owner, high costs might cancel out many of the advantages of outsourcing the point of sale finance. It takes time and effort to select the right third-party provider as a partner.

The benefits of providing a point of sale financing to online and offline businesses are as follows:



Benefits of Point of Sales Financing

The benefits of point of sales are not just limited to one party, all the three parties included in the business, the business owner, the moneylender and importantly the customers can benefit by using the point of sales financing option.

1.   Increased Sales using Point of Sales

Consumer Point of Sale, point of sales financing is well-known for boosting sales. These buy now, pay later agreements to allow customers to take benefit of products and services without having to pay in advance.

According to a study, over 76 percent of retail shoppers will make a purchase if immediate and easy point of sale financing is available. That is why you could notice that choice on your e-commerce shopping cart’s checkout pages. Firms understand the significance of it and how to make the most of it.

On the other hand, the same is true for purchases made offline. The purchasers can be provided immediate financing with the option to pay later, and they will not reject the transaction but rather seal the deal.



2.   Increased Order Value using Point of Sales

The average amount you make every selling transaction is the order value.

Offering point of sales financing boosts customers’ purchasing power by giving them access to more time to pay for their purchases, allowing them to select higher-value products.

Increasing the average order value purchased without cutting margins can boost a company’s profitability significantly. That is because, when you give a customer additional purchasing power, it is only natural for them to want to buy more and get the most out of a single transaction, especially if your businesses’ point-of-sale regulations restrict him from making another purchase until the previous one is paid in full.

3.   Improved Company’s Reputation using Point of Sales

Customers see brands who accept a point of sales kind of payment as being more understanding or sympathetic than those that do not. They see this as a gesture that recognizes the struggle of the regular shopper. It builds goodwill and encourages customers to stick with the brand. It may even persuade individuals to disregard unpleasant events.

Providing point of sales aids the brand’s growth by allowing it to engage with individuals. Once you have established that connection, the majority of the pieces will fall into place, since people gravitate toward things and companies with which they are acquainted and connected.



4.   Increased Customer Reach Using Point of Sales

Offering point of sales financing helps the businesses to broaden their demographic reach while also increasing their brand’s image.

It might also be a good option for folks who do not often qualify for personal loans or just do not have the time to complete loan applications. When you provide a point of sale financing, you expand your businesses’ consumer base. You may now reach out to additional people, such as youngsters, teens, and others, who have a limited amount of money at a given time yet want to make regular purchases.

Restoring the customer’s purchasing power will go a long way toward assuring repeat business. Consumers had a great experience with point of sales financing both online and offline. They may apply for the loan immediately now, without having to go through any long procedures or wait in bank queues. It takes only a few seconds for the clearance to be given. To top it off, customers are given full disclosure of their monthly payment obligations, with no surprises.

Using a trustworthy point of sale finance partner helps you to tap into your consumers’ requirements. Which makes it much simpler for your business to develop long-term relationships with the market suitable for your business.



5.   Improved Flow of Credit using Point of Sales

The benefit of point of sale financing is that the consumer receives the goods or services they want or need immediately now, and you, as the business owner, get paid right away. The point of sales process makes borrowing easy for customers. While also allowing you to expand your business by meeting market demand.

When sellers provide a point of sales loans through a third-party lender arrangement, that obstacle to seamless flow is removed. Buyers may simply purchase it, and sellers can sell without fear of the deal being rejected at the last minute owing to a lack of funds.



Sources Offering Point of Sales Financing

Afterpay

Afterpay is a point-of-sale financing firm. Instead of three, six, or twelve months of financing, Afterpay clients make four, interest-free payments every two weeks. Customers will never be charged interest or fees if they pay on time for the whole payback period.

There are eligibility requirements, however, qualifying customers receive fast clearance and don’t have to wait for delivery.

PayPal

PayPal’s normal online checkout includes two financing options:  Pay in Four, and PayPal Credit. PayPal Credit is an interest-free credit card that allows customers to pay for their purchases over the course of six months. Pay in Four provides four months of interest-free installment payments. At checkout, customers may select the option that seems suitable according to their needs.



When a consumer uses PayPal Credit or Pay in Four, shops pay a set cost ranging from 5 cents to 49 cents plus their usual transaction fee of PayPal, which is typically between 1.9 percent and 3.5 percent of each transaction.

Affirm

Affirm is a point of sale finance startup that offers clients installment loans. At checkout, the site provides three, six, or twelve-month repayment plans. However, these options may vary depending on the quantity of the transaction; some purchases may also demand a down payment, which is payable at checkout.

Customers may qualify for a 0% APR, however, rates often vary from 10 percent to 30 percent, depending on the borrower’s credit score. There are no surprises when it comes to late payments, prepayments, or account cancellations.



ViaBill

ViaBill is a point of sale financing platform that allows users to pay for items in four payments over a period of months, unlike PayPal. This is the sole financing option available to them. No interest is charged, and there is no credit check. Retailers are charged a thirty-cent transaction fee plus 2.9 percent of the transaction value, which is less than other client financing choices.

Retailers who use ViaBill may boost their average order value by 33 percent and their conversion rates by 18 percent. A user-friendly store dashboard is also available, making it simple to keep track of your funded transactions.



In the End

Consumers can take out a loan to pay for their goods and services at the point of sale. The merchant or a third-party lender may be in charge of the expense.

All parties involved profit from point of sale financing. But the business owner gets the most, with improved sales, increased order value, improved brand reputation, and easier cash flow. It will also encourage lenders to become more competitive by lowering interest rates and allowing for more flexible payment periods.

Overall, we discovered that point of sales as a concept has a lot to offer organizations. Despite the fact that it is not a new concept in the sector, e-commerce has brought it to the forefront. People find it to be a simple and trustworthy method of making purchases both offline and online.



Author Bio:

Aline Huseby is a Sales & Marketing Manager at ChargeAfter. She would like to share content on the Finance Industry like Point of Sales financing, Buy now Pay later, consumer financing & Ecommerce financing for the valuable reader.