Financial assistance allows customers who are on the fence about making a purchase because of the price to purchase from you right away and pay for the goods or services over time through monthly payments. This will prevent you from losing a sale due to sticker shock. Customer financing, or consumer financing, is the term used to describe this type of lending.
What is Customer Financing?
In order to determine whether consumer financing is a suitable fit for your business and clients, it’s vital to understand the complexities of the process. When viewed through the lens of a consumer, customer financing serves as a tool for converting shoppers into buyers.
The Impact of Customer Financing on Your Business
The majority of financing alternatives (particularly for online shops) are frictionless, take less than a minute or two, and allow for payment flexibility, resulting in a great consumer buying experience for the customer.
In most cases, a customer submits an application during the checkout process. They select the financing option in the same place that they would ordinarily select credit or debit as their payment method. The vast majority of applicants will be approved in a matter of seconds.
The total purchase price is paid upfront to retailers who offer customer financing through a third-party platform, with the exception of a regular transaction fee that is the same as or slightly higher than the standard credit card processing fee. Nonpayment and fraud risk is reduced for merchants by POS finance partners, who also provide seamless connectivity with the majority of POS and online shopping platforms.
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