Imagine that you’ve spent serious money on marketing, you’ve printed coupons and even taken out an ad in your local paper. You’ve gone all out and purchased the very best and latest in back-to-school products, created the perfect promotions and offers and your stores shelves are full looking glistening fresh – just like the day you opened your business. As expected, the shoppers start streaming into your store, one by one, and you’ve finally got that smile back on your face.
The shoppers are swiftly filling their baskets and taking their products to the checkout counter ready to pay. You ring up the orders, tell them the price and you’re handed a shining new plastic credit card – ready for you to swipe away and send the new customers along with your shopping bad in hand… One little problem or snag,… you don’t accept credit cards!
That was the personal reality show of many retailers starting in the 60’s who were reluctant to move towards new payment methods and decided on the status-quo. Today, you can’t find a single canteen, bodega, corner store or business of any size that doesn’t accept plastic. In fact, retail and payments are rapidly turning into “cashless” and many businesses refuse to accept tender greater than $50 or $100.
The short story above was also known as credit 1.0 or the intro of an alternative payment method other than cash into the retail world. If we look back to history, we can find many other examples of currency changes, such as the move from precious metals into cash, or animals into precious metals etc. for trade.
Today we’re in the era of yet another massive change of currency. The currency of credit. Most people and merchants still believe that credit cards are the currency or payment method of choice and that consumers are flocking to apply for new cards with high limits, free miles and all the other perks associated with plastic. The truth is, credit cards are becoming more about credit and less about cards.
According to bankrate.com, Millennials are the least likely of any age group to pay their balances in full each month. In fact, only 40% of them pay their entire balance every month, compared to 53% of adults 30 and older. But the issue here isn’t “credit cards” the real problem that consumers face is the aversion to growing debt. In fact, many of the millennials have witnessed some sort of financial crisis with a parent, loved one, friend and of course the news. Additionally, with the growing costs of higher education, most millennials are already tens of thousands of dollars in student loan debt even before they started living their life.
Consumers are still consuming. eCommerce is still having a steady 15% annual growth. Amazon just had a record “Prime day” with over $7 billion in sales in just 48 hour (a 72% increase YoY) according to “Internet Retailer.”
Point of Sale financing, Checkout financing, or consumer financing. Call it what you will. Checkout financing is rapidly become the payment option of choice by shoppers, and there are several reasons for that.
Now that we understand that our current and future consumers (Millennials and “Gen Z”) are opposed to plastic or credit as we know it, why should you be offering point of sale financing as a payment method in your store – today.
From this data, we can learn two things. First, the longer the checkout process, the more likely customers are to walk away. Second, credit cards cause a lot of grief when it comes to completing payments.
The solution to both issues is simple: Consumer financing. Implementing ChargeAfter takes care of both issues simultaneously. Here’s how:
Consumer financing streamlines checkout, addressing all the major factors that might otherwise lead to abandon carts.
Consumers making a high dollar purchase already have enough decisions to make. When it comes time to decide how to pay, they’ll avoid pressing the buy button at all costs when their credit card is at the receiving end of the transaction. However, when they’re able to painlessly pick their own financing terms, the decision to check out becomes a lot less painful!
Instead of the last decision being “should I stay, or should I go?” make sure your customers’ last decision is “which of these financing terms is right for me?” Your abandoned carts rates drop, conversion rates rise and, best of all, returning customer numbers soar.
ChargeAfter’s platform was founded with the goal to help every consumer access to fair, and obtainable financing options tailored to their unique needs.
ChargeAfter is a market leading financing platform that empowers retailers to offer consumers personalized financing options at checkout from multiple lenders. Through our growing network of global lenders, retailers can approve up to 85% of applicants in real-time and increase sales by up to 45%.
ChargeAfter’s network offers seamless integration for lenders to increase their customer base and compete for business while expanding into new retail markets by streamlining the distribution of credit into online and in-store point of sale financing.