The Paradox of Choice says that fewer choices mean lower anxiety for shoppers—fewer chances to make a purchase they’ll regret. But this doesn’t apply to payment options. Nearly 10% of customers abandon their shopping carts on ecommerce sites that don’t offer a diverse range of payment options. The numbers don’t lie: Point of Sale Financing = More payment options, and more choices means more sales.
This is precisely why consumer financing has rapidly risen in popularity. More than just the choice between Visa or MasterCard,
Point of Sale consumer financing gives shoppers a much broader choice of options. What sort of interest rate do you want? What monthly rate are you comfortable paying? How long do you want the term of financing to last? These choices don’t create a paradox—they create opportunities, leading to sales.
There’s a positive domino effect that happens when shoppers are given more options and more choices for Point of Sale consumer financing. Putting the power of flexible financing at the fingertips of a buyer has staggering results. Let’s take a look at the numbers.
High approval rates are just the start. When approved, consumers unlock a new level of buying power they’re in direct control of. Because they pick their terms and understand their payback structure, they have the confidence to make purchases higher than they would with a credit card or out-of-pocket. The result here is, on average, a 52% increase in average order value.
The benefits don’t stop here, either! There’s one final domino left to fall. More customers approved for financing—with favorable financing behind them—spurs confidence in buying. They’re checking out with bigger orders more frequently, which ultimately leads to, on average, a 30% increase in sales for retailers offering financing.
These numbers are staggering—maybe even more so when you account for other data, such as returning customer frequency, margins, customer loyalty and even customer acquisition costs!
Ecommerce sales are increasing year over year, still growing at an exponential rate. Unfortunately, as more retailers join the party, consumers have more options to choose from. That means more competition for every retailer in a specific space.
Retailers working hard to stand out amongst the competition need to find new ways to compete, without sacrificing margins. Consumer financing is the way to do it. Not every retailer has found a way to implement consumer financing, which gives the edge to those who have. They’re able to offer their customers a key differentiator: The ability to pick their own payment method.
The future of ecommerce is all about more. More sales, more shoppers, more opportunities, more competition and so on. To keep up and stay competitive, online retailers need to embrace more. Today, the simplest way to do that is to offer more options and more choices when it comes to payments, to reap the reward of more sales as a result.