Why use point-of-sale finance?
With the huge increase in online shopping over the last decade, particularly of large consumer goods as well as services, people as well as businesses prefer to have more flexibility when it comes to paying for these items to help keep their finances in check.
This is where point-of-sale finance (POS) steps in. With big purchases where it may not be feasible or cost effective to pay for items in full, POS finance is a flexible way to keep initial payments down and allows the customer to pay affordable monthly payments over a given period of time, usually from 6-60 months.
POS finance has become a very popular way of financing purchases which businesses are now using to their benefit as well as individuals. This could include the purchase of manufacturing or medical equipment to electric charge points for their fleet of company vehicles. This helps businesses keep their finances in check and allows for them to allot crucial spend elsewhere within the company.
How does it work?
POS finance is typically first encountered when the individual making the payment reaches the checkout of their online store. As well as the option to pay in full using credit/debit cards and sometimes services such as PayPal, there is an option beside these forms of payment to pay in monthly instalments; this is accompanied by a representative example of how your payments can be spread out and any %APR rates that are subject to the finance offered.
Questions the purchaser may have regarding situations where they fall behind on payments or choose to settle the full payment early are covered in the terms and conditions and FAQ sections which accompany the application for finance.
Once the individual/business has agreed to the terms and conditions their side a credit check will typically be carried out on the payee to ascertain their financial situation and if they are able to afford the monthly repayments. Most lenders will partner with credit checking agencies, who will carry out checks on behalf of the lender. In Buyline’s case, TransUnion are our credit checking partner.
With the ever-evolving world of technology, financial lenders are employing new tech to help customers to manage their payments, including bespoke phone apps that can track their purchases, where they are regarding their repayments and portals to online shopping resources.
Lenders who employ bespoke technology solutions are known as Fintech companies; using new technology to help streamline their lending and making the process as simple as possible for their end customer.
Ease of use
A key decision-making influencer for using POS finance is its ease of use to setup and manage. Many credit checking companies have the facilities in place to make immediate decisions on end user credit viability, which saves both time and worry.
Once a customer has clicked on the finance option in their shopping cart, agreed to their terms and conditions and finance amount, they can easily manage these payments on a monthly basis, especially using smartphone apps some lenders offer as mentioned previously, individuals can monitor their spend and repayments in their app to ensure they are up to date with money owed. This makes the whole process more user-friendly and provides the customer with a useful tool they can use while on the move.
To find out more about how Buyline can help you or your business, feel free to have a chat with us!