Exploring the rise of point-of-sale financing

This blog is the third in a series about point-of-sale financing, discussing how it has grown in popularity, why it impacts credit cards, and whether the industry is positioned for continued traction. Read part one and part two.

In my second point-of-sale financing blog, I outlined how lenders work with retailers on point-of-sale financing and the three models that companies use. Now, we’ll explore the ways lenders offer these loans to consumers and how point-of-sale can meet retailers’ needs.

As we’ve discussed, point-of-sale providers combine the strengths of personal loans and credit cards to target the initial consumer transactions. Lenders offer point-of-sale financing as an alternative to credit cards to meet the evolving preferences and needs of consumers. They may receive a smaller credit line than they need from their card issuers, have concerns about a negative score impact following high utilization or dislike the uncertain repayment amounts and timing of card balances.