What is point-of-sale financing?

There’s no question e-commerce is growing as a percentage of retail sales, accounting for 15% of U.S. retail sales in 2022 – up 9.4% year over year. However, most Americans still shop at brick-and-mortar retail stores. In fact, 40% of consumers make an in-store purchase at least once a week, compared to 27% of shoppers who make a weekly online purchase.

Offering more convenient financing options to the person standing at the register may keep shoppers in your store. Point-of-sale financing may provide businesses an opportunity to give customers of all credit types a more affordable alternative to high-rate financing.

The definition of point-of-sale financing

Point-of-sale programs, or POS, are offered at checkout in a retail store. It’s the process of transacting a payment in exchange for goods and services in person, at any given store.

The financing portion comes into play as an added option for customers who prefer to finance larger purchases or big-ticket items. Point of sale financing is an underutilized feature, but one with the potential to make a large impact on a company’s bottom line.

Benefits of point-of-sale financing

If you’re considering offering POS financing, there are some excellent benefits to consider – for your business and your customers.

1. More payment options
   With POS financing, you can offer customers more payment options to better suit their budget needs. Instead of swiping a credit card for the entire purchase, they can choose to apply for a plan to make more manageable payments over several months. This gives them more affordable options to get the items they need now and pay later.
2. Instant credit decisions
   Lenders don’t want to risk losing a potential customer if a credit application is denied. POS financing offers the opportunity for instant credit decisions that can underwrite a wide variety of consumer credit issues. In addition, customers won’t have to wait up to 24 hours to find out if they’re approved for a specific payment plan.
3. Easy financing
   One of the main benefits of offering a POS program is that you can streamline your paperwork by going digital. This means the financing process is completely secure and can be processed online quickly. Customers can then choose their desired payment plan and method of financing. This ease of financing allows consumers to instantly choose a plan that best suits their budget. 
4. Higher sales volume
   More options for buyers mean you can make more sales. Customers can finance a big- ticket item that they may not otherwise be able to afford.
5. Increased customer loyalty
   The convenience of not having to find financing elsewhere can ensure a positive customer experience. When you help a customer who has been denied traditional financing at other retailers, you win a long-term client and their repeat business. As their needs are exceeded, they’ll keep coming back.

​Three simple steps for customers

The goal of POS financing is to offer a more streamlined checkout experience for the customer while enhancing your own payment process. When a customer chooses to finance a purchase, there are three simple steps:

• Complete the application at the POS terminal.
• The application is reviewed for possible offers.
• Once approved, the customer can accept the terms and complete their transaction.

A POS financing system quickly and easily takes a customer through the payment process, giving them control to view the progress right there.

Reach more customers

Successful POS financing programs can be a win-win for you and the customer. You can reach a wider market, including customers with no credit or bad credit, while increasing sales growth within your business.

Consumers with imperfect credit want the same access to goods and services that other consumers enjoy. They’re in your store and ready to shop. They just don’t have all the funds to pay up front.

Snap Finance helps more customers get approved and get what they want need and want. Snap-branded solutions include installment loans, retail installment contracts, and lease-to-own financing for all credit types. Reach more customers and continue growing your business with Snap.

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Snap-branded product offering includes retail installment contracts, bank installment loans, and lease-to-own financing. Talk with your local Snap sales representative for more details on which product qualifies at your store location.

¹Not all applicants are approved. While no credit history is required, Snap obtains information from consumer reporting agencies in connection with submitted applications, and your score with those agencies may be affected.