pos lending

7 minute 10 Sep, 2021

Top Point-of-Sale Lending Methods When Expanding Payment & POS Consumer Options

Point-of-sale lending offers a viable solution to consumers looking to finance purchases of many sizes. The COVID-19 pandemic transformed the shopping experience by accelerating online shopping trends and presenting pay-later opportunities. With consumers always looking for new ways to spread out payments at no immediate cost, point-of-sale lending methods have become an effective solution to expedite the shopping experience. This article will explore some of the top such lending methods for consumers and merchants.


Point-of-Sale Lending Methods: A Retail Solution

POS lending methods provide mainstream acceptance amongst consumers and merchants alike. Ecommerce sales have grown exponentially in the last year, causing merchants to re-imagine their shopping experience. Some consumers may seek a quick solution involving a short-term payback option, while others would prefer paying long-term.

Online, point-of-sale financing can be integrated directly into a merchant’s online checkout. Primary lending methods include installment financing, an option with zero to no interest, a credit card with monthly or bi-monthly payments, personal loans, or other in-store loyalty programs. Point-of-sale lending methods help streamline the shopping experience and provide more financial growth opportunities for merchants and consumers alike.

Installment Loans

Installment loans offered through digital channels have streamlined the application process by granting consumers approval immediately instead of days. E-commerce merchants can benefit significantly from this option by promoting this offer to consumers before they get to checkout. This pre-approval reduces the friction that may turn consumers away when applying. The opportunity to apply for an installment loan before checkout increases consumers’ spending limit. Liz Pagel, senior vice president of consumer lending for TransUnion, reiterates this notion:

“Consumers are likely to spend more when offered this type of loan because they can finance the amount and see what their monthly payment will be before clicking the buy button. This financing option has exploded during COVID-19.”

Installment loans take many shapes. A consumer will typically need to provide their social security number, run a soft credit check, and provide basic personal information such as name, address, and birthday.

  • Lenders may offer a 0% annual percentage rate (APR) for a certain period
  • Repayments can be 6 -12 months long, depending on the purchase amount
  • The purchase will be split into four payments

Buy Now Pay Later

Should sales reduce, merchants can offer installment loans as a feasible option to fund consumer purchases. A buy now pay later option can serve as a simple and efficient solution for merchants. A post-purchase installment plan dates back to the days of layaway, a concept many consumers are familiar with. Many consumers opt for a buy now pay later option for smaller purchases broken down into four easy payments. Not to mention BNPL services rose nearly 78 percent in 2020—the biggest leap of all payment types and is projected to account for 4 percent of global eCommerce spend by 2024. BNPL can help merchants:

  • Increase sales on large ticket items
  • Remove consumer shopping hesitations 
  • Increase average order value

Consumers can benefit from a buy now pay later option as there is typically a period in which no interest is offered. With zero to no interest and a short repayment term, consumers are gravitating towards a BNPL option. BNPL has found a huge acceptance among millennials, given the growing mistrust of traditional credit card products. Millennials are aware of the debt and prefer to avoid credit. A smaller loan amount and short and easy payments appeal to them. BNPL options offer: 

  • Zero to no interest for the consumer
  • A soft credit check or no credit check 
  • Simple repayment schedule

Credit Cards

76% of U.S. consumers are more likely to make a retail purchase if a payment plan is streamlined by a straightforward point-of-sale experience. But not every consumer is looking to add large debt to their bottom line. Consumers with access to a 0% APR are more likely to opt for a credit card as their point of sale option. Credit cards offer an “as-needed” dollar amount for consumers to use on small to mid-level purchases. However, given high-interest rates, consumers may opt for a better financing solution. 

Private Label Cards

Private label cards offer great benefits for returning customers. Private label cards and rewards programs function based on how much the consumer shops at a given establishment and how much they spend. These programs typically operate under a cashback, rebate, point, or tier system. Discounts may also be offered, providing further incentive for the shopper to return. Loyalty cards provide several outcomes:

  • Drive customer retention
  • Provide valuable data to your business
  • Segment customers to target specific offers

The cost of attracting a new customer is higher than retaining an old one. In-store branded cards can provide the data needed to personalize the consumers’ experience and connect with their spending profiles. As a result, loyalty programs offer tremendous incentives to ensure loyalty.

Personal Loans

Personal loans offer a solution to consumers looking to make more significant investments. These investments include cars, furniture, vacations, and more. A buyer typically will opt for this option if they’d prefer monthly payments, have a good credit score, and could pay the loan back more comfortably over a long period. Traditional financial institutions and online lenders will generally lend a higher dollar amount ranging from $1,000 to $100,000. This amount is disbursed in a lump sum payment, making it convenient for consumers working within a specific time frame. 

Skeps Customizable Technology: Easy Integration For Merchants

When expanding payment and POS consumer options, merchants have many options when selecting partnerships. Options include third-party lenders, white-label in-house options, or lending technology specialists, among others. Skeps is a platform that enables merchants to implement multiple loan options from various lenders at point-of-sale, leading to increased sales and reduced cart abandonment rates.

Skeps platform facilitates the connection of borrowers to an array of pre-approved lending options where they can choose the best fit with a single application. This platform provides tremendous benefits to merchants by extending loans to borrowers while keeping their data safe, resulting in secure and streamlined shopping. 

Integration is simple, and Skeps provides a full suite of options including, APIs, platform extensions, and SDKs for mobile. You can check approval to get customer loan offers allowing for simplified loan completion. We provide a dashboard where merchants can:

  • Manage financing offers
  • View funnel metrics
  • Change available offers

Our customizable technology supports customer spending by notifying your customers that they have financing offers available to them. Customer profiles can be customizable by uploading their data in a CSV file to evaluate potential leads and choose which buyers to share leads with, completing an in-depth analysis on consumer metrics. This swift and efficient service improves the user experience resulting in boosts in revenue for your business.

Our next-gen point of sale financing platform uses innovative technology to provide a frictionless financing experience. So when exploring point-of-sale lending methods, look no further than Skeps. To learn more, request a demo, email us at support@skeps.com.

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Point-of-sale lending offers a viable solution to consumers looking to finance purchases of many ...


Skeps has a solution to improve your results—whether you are comfortably established or just beginning your point of sale lending journey. We are proud to provide a frictionless end-to-end financing experience through our next-gen point of sale financing platform. Give your business the Skeps advantage and reach out today.

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