Point-of-Sale Installment Loans - Market Research, Industry Trends, Market Share, Consumer Insights

This study reviews current consumer borrowing behaviors; strategic positioning initiatives by financial technology companies (fintechs), banks, card issuers and card networks; and the cross-border roll-out of those initiatives across product categories and commerce platforms. It also analyzes each of the principal business models in the industry, examining the potential viability of each model as more players join and bring their own marketing messages, merchant partnerships, revenue models, and targeted consumer cohorts. It provides a complete industry context for POS installment lending, an assessment of the strategies and success of extant and new participants in the sector, and a detailed analysis of the opportunities and challenges to those entering or competing in this fintech sector.

Why POS Installment Lending?

Creating a Role as Shoppers’ Preferred Partners

POS installment finance provides consumers with a convenient way to pay-over-time for digital and in-store purchases at interest rates that are either 0% or lower than those of credit cards. Fintechs are also natively masterful at communicating with their customers via mobile apps, texts, and instant credit approvals. They have stripped away the paperwork and the “no’s” of traditional retail lending.

Meeting Merchant Needs to Remove Purchase and Payment Friction

POS installment finance gives merchants a new way to close sales by removing payment friction that can lead to shopping cart abandonment, to make purchasing more affordable for their customers, and to create repeat customers whose purchase amounts are higher than is characteristic for those without installment financing.

Pressuring Traditional Consumer Credit Players into Innovation Mindsets

For traditional finance companies and banks, POS finance requires adopting a next-gen mindset of innovation. Competing with fintechs for installment lending market share and retention of their customer relationships forces lenders reliant on decades of consistent income from their credit card units to rethink consumer credit business models.

International POS Installment Credit Models Suggest New Markets, Strategies

While “POS installment” lending is a term used globally, the actual product, as it is experienced with individual nations or geopolitical territories, reflects that area’s specific characteristics. Each market’s solutions are customized to reflect its consumers’ household wealth, their experiences with consumer credit, their preferences for specific methods of payments, and that population’s level of adoption and use of Internet and mobile commerce.