The many benefits of flexible payment options are making them more and more popular, as they give consumers the freedom to purchase how they please. Consumer financing comes in many forms, including store credit cards, consumer loans and leases, and BNPL programs. Each of these finance products offers a variety of advantages to the consumer, but many retailers don’t realize how many ways they can benefit.
Benefits of Flexible Payment Options for Merchants
There are a few distinct benefits of flexible payment options for merchants which include:
- Higher conversion and average ticket size.
- Better rapport with consumers.
- More repeat business.
- High-quality data analytics.
- No labor requirement.
Let’s break down each of these and figure out what they mean for a merchant.
Higher Conversion and Average Ticket Size
One of the chief benefits of implementing quality consumer financing programs is the increased revenues it provides. It does so specifically by increasing conversion rates and the average order size of each sale. In fact, conversion rates rise around 20-30%, and average ticket size increases 30-50%.
This means that consumers are not only buying more often, but they are also either purchasing more in each order or opting for more premium products with better margins. In making any business decision, merchants are always sure to consider the effects on their profits, and it seems that flexible payment options perform well in this regard.
Better Rapport With Consumers
Building rapport with customers is done largely by offering unique value to them during the sales process. Luckily, there are numerous benefits that financing provides customers, like:
- Lower upfront costs.
- Convenient payment structure.
- The ability to buy what they want, when they want.
Offering these benefits through flexible payment options can help merchants set themselves apart from the competition. A seamless, convenient, customer-focused purchasing experience leaves a good impression and ensures that those customers feel taken care of. This can have a tangible effect on business, which leads to the next benefit.
More Repeat Business
While increasing the likelihood and size of a single sale is a substantial benefit in itself, it is compounded further by the increase in the repeat business that it provides. Affirm is a popular fintech lending platform, and they reported that 90% of their gross merchandise value came from repeat business.
This spells good things for merchants that rely on repeat business to maintain steady revenues. Consistency is critical for growing businesses, and the ability to maintain strong, lasting business relationships with a consumer base gives business owners the peace of mind they need to make growth-focused financial decisions moving forward.
High-Quality Data and Analytics
By offering financing themselves, merchants get access to an extra set of helpful sales data that they wouldn’t have if the consumer had to obtain it elsewhere. By knowing what consumers buy and how they buy, merchants can better understand their ideal customer profile and more effectively target their marketing and finance products to them.
Moreover, a quality fintech partner will ensure that merchants have a clean, readable dashboard that allows them to analyze the data their customers provide easily. This takes a lot of the extra effort off the shoulders of business owners and allows them a simple way to view and react to new information without hiring anyone to enter or organize it. That connects well with the final key benefit of flexible payment options for merchants.
No Labor Requirement
Luckily, merchants don’t have to take the financing journey on their own. In today’s market, experienced fintech partners can connect merchants with networks of quality lenders with ease.
These partners take care of all of the details, including:
- Creation and deployment of the software interface.
- Maintenance and bug fixes.
- Information gathering and organization.
- Data security.
- Lender relations.
All of these functions would normally require extra staff and resources if a merchant wanted to handle them in-house. With a quality fintech partner, merchants can benefit from the economy of scale and save both money and time while still offering a cutting-edge experience for their consumers.
Unlock the Benefits of Flexible Payment Options With Skeps
Skeps ensures that retailers can benefit from all of these key features and more with our POS financing program. As the only end-to-end consumer financing platform, we offer unprecedented approval rates and speed while keeping data safe. Our platform can be used on any online point of sale and with a wide variety of consumer financing offers.