New research from retail finance specialist Pay4Later amongst mid-sized retailers reveals the vast majority expect a major increase in sales through white labelled finance packages they offer customers.
Pay4Later, the UK provider of point of sale credit, enables retailers to offer finance solutions including interest-free credit to customers. To facilitate this, it works with reputable and established finance companies including Close Brothers, Shawbrook Bank, RateSetter and Omni Capital to offer secure and convenient online finance.
Between now and 2017, two thirds (66%) of the retailers interviewed said that they expect their sales via white labelled customer finance packages to rise, with 36% claiming they will increase by over 10%.
The main reason for the growth of retailer finance packages is that the process of offering credit to customers is becoming quicker and more efficient, the view of 54% of retailers interviewed. This is followed by people being more willing to take out credit (44% of retailers said this) and more credit being made available to them (the view of 25% of retailers), especially through the rise of new and alternative lenders. Improvements in technology have also made it easier to understand a customer’s credit profile and reduce the chances of loans becoming bad debt, increasing the confidence of retailers and lenders to provide credit (the view of 14% of retailers).
Scott Law, CEO of Pay4Later, said: “The amount lent to shoppers through our platform has increased by over 100% in the past 12 months. We estimate that retailers who cannot provide finance packages for major purchases are missing out on around £4.9 billion in sales a year and more are waking up to this loss. Our analysis shows retailers that offer credit can see sales increases of up to 40 per cent and order values rise by up to 300 per cent.”
Pay4Later’s research reveals that of the retailers interviewed, 27% believe that over 10% of their annual sales are made through finance deals they offer customers, and one in ten puts this at over 20%. One in four (25%) say their sales here are significantly higher than they were three years ago, and 15% say they are ‘slightly’ higher. Only 9% say they are lower.
Pay4Later, which works with over 1,000 retailers, said it has expanded its panel of lenders to substantially increase the chances of shoppers being accepted for credit.