You may be wondering, what is a POS purchase? Point-of-sale, or POS, refers to the moment a customer purchases your product. A point-of-sale purchase is any transaction. "Point" refers to a location. The point-of-sale is the transaction event itself, while the point of purchase refers to the checkout area.
A point-of-purchase strategy entails finding ways to entice customers to make a higher dollar purchase before the point-of-sale or checkout occurs. Not only does POS financing enable point-of-sale transactions, but it also encourages higher point-of-sales.
Whether from your storefront or website, POS is the terminal through which you deliver services. POS financing is a solution to high-dollar transactions. Your customer needs your product, and you need to make a sale. With POS financing, the customer can purchase your product, even if they don't have the cash for it upfront, without fear of going into immediate debt. It's a new name for an old concept.
It works by integrating with the checkout process. At checkout, merchants can offer POS financing along with other payment options such as Visa, MasterCard, Digital Wallets, and PayPal.
Through some forms of POS financing, both the retailer and the customer can receive the benefits of their transaction instantly. You, the retailer, will receive your money in full, and the customer will receive their product. Payments on the product are arranged between the customer and the lender. POS financing allows the customer to make multiple installment payments on a big-ticket item over time, enabling you to close a sale and the customer to get what they need when they need it. It's a win-win!
In short, you can grow your business with results unique to POS financing. Developing a strong POS strategy is key to delivering a seamless experience to customers, incentivizing them to come back. POS financing should be an important aspect of your overall POS strategy for several reasons:
The data doesn't lie; nearly 40% of point-of-sale purchases are made on credit, and of credit-users, 74% think installment plans are helpful when making large purchases upfront.
Consumers have spoken, and they've made it clear that they value purchasing power over credit card rewards and high credit limits. They want payment options that won't penalize them and send them into immediate debt. POS financing puts purchasing power back in the consumer's hands, and offering this service will make your business more consumer-friendly overall.
Customers are looking more and more to nontraditional payment methods, and offering a flexible payment plan through Finturf's POS financing can give you a leg up on the competition.
As the lending industry continues to sky-rocket, it's more important than ever to understand the customer better than anyone else and offer services that cater to the customer's needs. POS financing is a revolutionary strategy that opens your company up to a business you could not obtain otherwise. Here's how:
The answer is, almost unequivocally, yes! Retailers in nearly every industry can benefit from POS financing, and for some industries, it's practically a necessity. If you choose to go with POS financing, you'll be in good company as more and more retailers discover the potential of this new-name, old-concept payment method.
For small businesses, POS financing offers the opportunity for growth. For large corporations such as Walmart, which utilizes Affirm, POS financing solutions are an opportunity to retain their customer base.
Another unequivocal yes. POS financing is seen as a safer alternative to credit cards, and consumers have shown that they look more favorably upon zero-interest POS financing than traditional lines of credit. Buy now, pay later platforms are a simplified, transparent route for consumers who want to make installment payments. One of the greatest aspects of POS financing on the consumer end is that it is predictable. When signing up for a POS financing option, consumers are in the know about exactly how much they will owe and when, and there's no doubt about when they can expect to clear their debt.
One of POS financing's biggest proponents is MasterCard, which recently acquired Vyze, a POS financing platform, for an undisclosed amount. MasterCard did this because they know that credit card use is declining among Millennials and Gen Z-ers, who will make up 40% of the market in 2021.
POS financing gives consumers the best of both worlds — they can safely and transparently make installment payments on a purchase without committing to a credit card.
POS financing is relevant to all retailers, but especially those who sell high-ticket items and services. For example, funeral services, medical services, retailers of appliances, and heavy equipment.
For many consumers, purchases with a large finance point but without financing are not realistic. Simultaneously, they may be wary of using traditional credit lines that charge high-interest and come with severe penalties. Acquiring the money needed to make essential, high-dollar purchases may take a while, meaning consumers are delaying purchases they would readily make, and merchants miss out on sales.
POS financing isn't just for big-name retailers like Walmart. POS financing is becoming more prevalent even for small, casual purchases. Small businesses can use point-of-sale financing companies, with many benefits to small business owners. Benefits include:
There's no better time than now to get started. The market still isn’t saturated, and industry experts expect POS to keep growing in popularity.
With this in mind, there's no time like the present to get started. Here at Finturf, we can help set you on the right path. Contact us today for more information about what we have to offer!
To learn more about POS financing, contact us at Finturf.