Survey Finds Debit Card Users Most Attracted to Point-of-Sale Credit

Jul 24, 2019

A recent online survey shows that people who pay for purchases with debit cards or prefer to would consider using point-of-sale credit to pay for even common household items, like groceries.
This indicates that consumers are willing to embrace alternatives to credits, even if it means paying installments for everyday items.

According to New York City-based Auriemma Research, about 40% of debit card holders would use point-of-sale credit to pay for even small, low-cost items.
According to the research firm, borrowing via an installment plan is less intimidating to many consumers as compared revolving debts on credit cards.

Auriemma’s recent issue of The Payments Report showed that about seven out of 10 cardholders appreciated installment plans because it allowed them to budget better and alleviated the stress of making bigger purchases. They consumers, which included 800 debit card users who were surveyed, also really embraced being able to pay balances over a period of time.

Unsurprisingly, bigger ticket items like, electronics, home appliances, and furniture, were bought with installment credit, however, about 25% used this type of lending to purchase clothing and 17% used it for common shopping cart items.

What is Point-of-Sale Credit, and How Does It Work?

Point-of-sale credit or installment credit is a type of financing offered to customers when they approach checkout areas. It is done when they are about to complete transactions to entice people to buy more or buy things they didn’t think they could afford. This type of financing is considered consumer-friendly because eligible borrowers get approved on the spot, and the credit can be used to buy something immediately.

Point-of-Sale Lending Is Catching On

As major banks, like JP Morgan Chase & Co., and fintechs, like Affirm Inc., have begun offering installment lending, it has allow this type of financing to grow in reach and volume. A few months ago, Affirm announced it was partnering with Walmart to offer point-of-sale credit to its customers.

Like, Affirm, financial technology companies have recognized that installment lending appeals to millennials, the generation that grew up during 9/11 and lived through the Great Recession, because they are more leery of accruing large amounts of credit card debt.

In the case of Affirm, its buy now, pay later financing option allows approved users to 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 to be a more transparent option over credit cards.

The Last Word on Point-of-Sale Credit

Point-of-sale lending not only serves shoppers better by offering alternative ways to pay, but it benefits merchants. Businesses are able to reach those consumers who are ineligible for credit cards and are unable to make larger, more expensive purchases.

Oftentimes, businesses see significant improvements sales because they are able to entice shoppers into upgrading their buys or adding to their carts because they are offered financing when they are ready to pay. Additionally, now that consumers have said they are willing to make even the smallest purchases with installment credit, it can only mean more dollar signs for merchants.

If you want to reap the benefits that point of sale credit financing offers, then turn to EMB offers personalized, no-credit-check payment solutions based on clients’ cash-flow needs, margins, and risk tolerance.

Point-of-sale credit can be beneficial to businesses of all sizes and industries. By offering financing to your customers, you can boost your sales, improve customer loyalty, and build repeat customer bases. Apply online today to cash in on the benefits.

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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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