New Walmart Deal Proves Consumer Financing on an Upswing

Mar 29, 2019

Consumer Finance at the Point of Sale Takes a Big Step Ahead As Affirm Clinches a Walmart Deal – New Walmart Deal Proves Consumer Financing on an Upswing

Lending startup Affirm Inc. clinched a deal to offer its instant-financing option to major retailer, Walmart Inc. Though Affirm has already signed up more than 2,000 merchants to accept its consumer point-of-sale lending solution, or better described as buy now, pay later, its deal with Walmart marks its first venture with a bricks-and-mortar retailer.

Shoppers will have access to the financing option on Walmart’s ecommerce cite, as well as in the retailer’s 4,000 stores nationwide.

How the Financing Works

With the point-of-sale financing that Affirm offers, approved users repay purchase amounts with monthly installments over three-, six-, or 12-month periods. Unlike credit cards, the interest it charges is displayed in actual dollars instead of percentages. Many find this option more transparent, and can help borrowers budget better.

When a shopper wants to take advantage of the financing at a store, the user receives a barcode on his/her mobile device to scan at the point-of-sale. All loans with Affirm are made by Cross River Bank, Teaneck, N.J.

Financing Limits

Shoppers can finance purchases between $150 and $2,000, but the option cannot be used to buy:

  • Alcohol
  • Tobacco
  • Groceries
  • Pharmacy items
  • Personal-care items
  • Firearms
  • Money services, like gift cards

Also, the option will not be available at Walmart stores located in Iowa, West Virginia, and Puerto Rico.

Affirm also already offers a different type of loan that lets consumers borrow to buy a product or service from any merchant, not just one that has an existing partnership, such as Walmart, with Affirm. App users who are approved for a loan are given a temporary credit card number to be used at the point of sale of whichever store they choose.

The Genesis of More Consumer Financing Options

Fintechs, like Affirm, have recognized that the millennial generation, those between the ages of 23 and 38, prefer making purchases with installment loans instead of credit cards. After seeing their families and friends struggle through the financial crisis and mounting credit card debt, millennials have warmed up to alternative ways to pay.

They also like that financing is approved and can be used immediately.

What Happens Now?

Now that a major chain is on board with Affirm, it is likely that other retailers with physical locations to follow its lead. Like Affirm, banks and fintechs see point-of-sale lending as a growth business and a simple alternative to credit cards.

Affirm also crunched the numbers to back them up. In 2016, Affirm conducted a survey of more than 1,000 consumers ages 22 to 44 to find out their views toward consumer credit. Many feared carrying debt and almost half described experiencing less enjoyment in their purchases when they still carried credit card balances. One of the most interesting facts is that 87% of respondents expressed an interest in paying for large purchases via monthly installment loans because it helped them keep track of what they owed.

The Final Thoughts on Consumer Financing

Point-of-sale lending not only serves shoppers better, but it also has benefits for merchants. Giving consumers another way to pay provides merchants with another way to reach shoppers who do not have credit cards or the means to may significant purchase at that specific moment. This type of funding often leads to dramatic improvements in sales.

If you want to reap the benefits that financing programs offer, then turn to eMerchantBroker.com (EMB). EMB offers customizable, no-credit-check options based on clients’ cash-flow needs, margins, and risk tolerance.

Consumer funding is beneficial for businesses of all sizes and industries. By offering financing to your customers, you can boost your sales, improve customer loyalty, and build repeat clientele. Apply online today.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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