Simplifying the Point of Sale Financing Process through LendFoundry

As we enter 2024, we are already watching fierce competition across merchants to acquire customers and at the same time retain the current customer base. While doing so, having a smooth sales journey from prospect to closing and subsequent after-sales support, with the customers should be of paramount importance. 

Merchants offer different financing options like 'Buy now, Pay later' or installment payment plans during the sales process to prevent customers from delaying their purchase due to financial constraints. Installment payment plans which allow the customer to split the purchase cost over a defined period, are generally referred to as “Point-of-Sale” Financing. This financing can be available completely online at checkout or in an offline mode provided by the merchant at the store. Unlike Personal Loan applications, customers will not be required to fill in separate applications with the lenders in the POS financing.

 

POS financing is growing faster than any other type of unsecured lending and is projected to grow at a compound annual growth rate (CAGR) of 20%. Growth is observed in the smaller ticket purchases, led by consumer electronics, and household goods. 1

 

Tools Required for Effective Management of Point-of-Sale Operations

  • Integration with eCommerce Website - It is crucial to have API-based secured integration with an eCommerce website to protect customers’ Personal Identifiable Information.
  • Borrower Portal/Customer Portal - The Borrower portal will ensure a smooth loan application experience (Required Documentation and Agreements) and also act as a one-stop portal for repayment information.
  • Loan Origination System - The Loan Origination system will facilitate application processing, credit review, and documentation management. 

 

Point-of-Sale Financing offers Merchants the Following Benefits

  1. Lower cart abandonment rate:  Customers with financial constraints will have the option of alternative payment method and spreading the cost over the installment, thereby increasing the Sales conversion rate.
  2. Customer Experience: POS financing enhances the overall experience by providing customers with flexibility and convenience at the point of sale. The checkout process for customers is hassle-free because of a single application, instant approval, and integration with lenders.
  3. Competitive Advantage: An integrated POS application process will further reduce the cost of operations and loan processing time for purchases from customers. If given POS Financing support, merchants will be better positioned in the crowded market. 

 

How LendFoundry Provides the Product to Facilitate Point-of-Sale Financing for Businesses and Merchants

POS Financing - LendFoundry

 

Lender Marketplace Solution

LendFoundry provides Lender Integrations which allows a business to integrate with multiple lenders and provide the best available financing option to the customers.

Key Features:

  1. A platform for all sales units (Merchants) to manage the deals.
  2. Simple to navigate and secure application intake from customers and merchants to protect Personal Identifiable Information (PII).
  3. Integration Capabilities- Ability to integrate with third-party credit bureaus, and KYC validation third parties.
  4. Lender Integrations- Seamless integration with multiple lenders (list available on request) to provide application details and receive the best available financing option for the customers.
  5. Provides an ability to switch priorities between the different lenders as per the business units.
  6. Provides an ability to conveniently manage loan applications across Lenders and merchants.
  7. Management of all the sales unit applications through a centralized platform.

By partnering with LendFoundry, businesses can unlock the immense potential of POS financing.  Our comprehensive solutions empower merchants to offer a frictionless financing experience to their customers, ultimately driving increased sales conversions, customer satisfaction, and business growth.

 

LF–POS Lending Solution

LendFoundry provides the complete LF-POS Lending solution which allows businesses to manage multiple merchants' accounts and centralize the KYC, Credit, and Underwriting Process to facilitate the loans.

Key Features- 

  1. Customized, seamless application form for the customer with various application data rules, and association with the specified merchant account.
  2. A dedicated portal for the Merchants to process their applications.
  3. Onboarding of the Merchants in the platform after initial KYC verification. Merchant portal provides visibility over merchant-specific loan applications.
  4. API Integrations with CRM systems, Single Sign On user control for the users across the organization.
  5. Centralized platform for all the Loan applications across the merchants for  KYC, underwriting, decisioning, disbursing the funds, and servicing. 
  6. Seamless disbursement of funds to the merchants. Effective servicing of the loans, visibility of the Next payment schedule, and key loan parameters to the customer.
  7. With the access to Borrower Portal, the Borrower can easily apply for the top-up loan request and configurational workflow for instant approval of such requests.

By partnering with LendFoundry, businesses can unlock the immense potential of POS financing.  Our comprehensive solutions empower merchants to offer a frictionless financing experience to their customers, ultimately driving increased sales conversions, customer satisfaction, and business growth.

 

Reference:

1Pattamatta, P.; Dabadghao, S.S. Models for Point-of-Sale (POS) Market Entry. FinTech 2022, 1, 318-324. https://doi.org/10.3390/fintech1040024

  • April 2, 2024

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