Fintech lending companies give merchants the ability to offer financing to their consumers throughout their shopping journey, with simple applications at the checkout screen. The types of financing offered by each platform vary, but they all make larger and more premium purchases much easier for consumers and thereby increase the profitability of the merchants that utilize them.

The problem for merchants is that there are so many fintech partners to choose from. Each offers the basic consumer financing options like instant installment loans and no-interest “pay-in-four,” but that doesn’t mean all platforms are created equal.

To give merchants an idea of what the differences between various platforms are, we are going to discuss the three principal aspects of a POS platform, which are:

• Terms
• Approval speed
• Financing options

As we discuss each, we will break down what some of the more prevalent fintech providers offer. The comparison will include four major players: Klarna, Affirm, Afterpay, and Skeps.

Terms of Financing

Different fintech firms are going to have different terms as a result of their various funding sources. So when we talk about terms, we are referring to a few different things, which are:

• The type of credit checks and whether they are required
• Late fees
• Maximum financing amount

Let’s break down how these four firms handle each.

Credit Checks

Klarna, Affirm, and Skeps all utilize soft credit checks instead of hard inquiries when customers apply for financing. This means that these credit checks will not affect a customer’s credit score, which makes the application process less risky for consumers. Afterpay doesn’t perform a credit check at all, a benefit that comes at the cost of far more limited financing options—more on that later.

Late Fees

Affirm has a blanket no-late-fee policy. Because Skeps utilizes a network of different lenders, some charge late fees, and some do not.

Afterpay charges a $10 fee for late payments and an additional $7 if that payment isn’t made within a week. Klarna also charges $7, but it is a single charge and is only triggered after a payment is ten days late.

Maximum Financing Amount

Below are the maximum financing amounts for each of the four fintech lending companies we are comparing.

Afterpay, due to being limited to pay-in-four financing, has the smallest cap by far at $2,000. Klarna and Affirm provide much higher caps as a result of their slightly more flexible lending options with credit checks and interest. 

Skeps is able to finance just about any size purchase, as we work with a network of lenders, allowing the provision of more flexible lending options.

Approval Speed

As a result of their different lending sources, each of these firms has a different method of gathering approvals. This changes the speed at which consumers get notified of approval. Luckily, all of these firms are pretty similar in that they all offer near-instant approvals.

Afterpay’s applications are instant because there is no credit check required. Their applications rely only on the information that consumers fill out, so there is very little time needed to supply a declination or approval for a purchase. Klarna and Affirm offer near-instant approvals because they only work with one or two funding sources, meaning the application doesn’t have to go far before being approved or declined.

The concern with platforms that work with several lenders is the traditional waterfall approach that checks applications against lenders one at a time. This adds time to the approval process, adding more friction for customers. Luckily, Skeps has innovated a simultaneous lender matching approach, which is able to check applications with their entire network of lenders simultaneously and provide the best offers to the customer near-instantly, just like Klarna and Affirm.

Financing Options

Below are the financing options provided by each of the four fintech lending companies we are comparing:

Afterpay only offers one financing option, providing consistent yet inflexible financing for small-ticket consumers.

Affirm and Klarna offer financing options that are still limited to the more modern consumer financing products but offer a bit more for customers of medium-ticket merchants as well.

Skeps offers by far the most versatile financing, working with lenders that provide every type of financing that is typically available when an applicant walks straight into a bank. This allows merchants of any type or ticket size to offer the best type of financing for them and their customers, including credit cards and leases that directly encourage repeat purchases or services in industries that can take advantage of it.  

This means that Skeps can even meet the needs of big-ticket and specialized industries like construction, home improvement, travel and hospitality, medical/dental care, and more.

The Best of Fintech Lending Companies With Skeps

Skeps offers a comprehensive, end-to-end consumer financing platform that helps businesses modernize their entire payment process. Working with an entire network of established lenders, we go above and beyond one-click payment, also offering a one-click application process for several different types of consumer financing, including:

• Installment financing payment plans
• Co-branded credit cards
• Consumer loans and leases

If you’re looking to partner with a forward-thinking fintech company that will keep consumers' eyes on the purchase while offering best-in-class financing, Skeps is the perfect fit.