By James Bradley
DivideBuy
Hot on the heels of a record-breaking Black Friday (as reported by BBC News, www.bbc.co.uk/news/business-59409507) and a highly anticipated peak-sales spending boom, 2022 could well be the year of the consumer.
With consumer spending forecast to expand by a further 3 percent in 2022—on top of the 8l1 percent rise recorded over the past 12 months (according to Deloitte Insights, https://bit.ly/3H27jzY)—the coming years ahead present another exciting opportunity for retailers looking to embrace alternative POS payment methods.
Once a niche form of credit, buy now, pay later (BNPL) has gained momentum among both younger shoppers and older cohorts and is set to continue scaling rapidly. According to Bloomberg Intelligence, global BNPL sales volumes hit $93 billion last year and could top $181 bill by the end of 2022 (https://bloom.bg/3yMQAhw)—a small percentage of online retail perhaps, but the share is clearly growing fast.
In a world where time is money, retailers can rest assured that setting up IFC POS finance at checkout is both quick and easy, with the provider taking care of installation and integration with a retailer’s existing ecommerce platform.Seamlessly connecting the checkout to the merchant’s website, retailers can be onboarded in a matter of days, leaving them free to get on with the important business of selling. What’s more, as lendtech providers personally accept the fraud and credit risk, retailers can continue to operate as normal and get paid on delivery—safe in the knowledge that their credit provider will take care of the credit lending process.
With a swift application process and immediate decisioning, customers can spread the cost of their purchases with no hidden charges. Rather than relying on credit history alone, BNPL providers consider consumer circumstance and affordability today, helping retailers secure more orders with higher acceptance rates.
This straightforward, interest free payment method undeniably increases sales, reduces basket abandonment and encourages higher ticket purchases. In addition, offering monthly installments with an instant credit decision allows customers to proceed with their purchase at the same rate as they would normally, while interest free credit encourages upsell by having a minimum spend threshold, cross-sell and sales of product bundle sets, resulting in an uplift in average basket value.
And contrary to popular belief, it’s not just fast fashion brands that benefit from BNPL finance. Ecommerce and higher basket values demand longer form IFC options. This greater flexibility enables consumers to make higher-value purchases and spread the cost over longer periods. Strong participation in the DIY and home improvement markets is indicative of how consumers are increasingly turning to IFC to finance those higher-value purchases.
What’s clear is that POS financing such as BNPL is fast becoming the future of consumer financing. The fact that online spending via BNPL has increased by 204 percent since the beginning of 2020 (reported by Card Not Present, bit.ly/32aD9Ml) is a testament to its surging popularity among retailers and customers alike.So, as the payments landscape continues to evolve, the growing market for POS financing presents not only an exciting opportunity for retailers as we look ahead to 2022, but also a long-term sales opportunity that, frankly, must not be missed. 
James Bradley is head of business development at DivideBuy, a consumer retailer credit provider founded in 2014. DivideBuy works in partnership with over 500 retailers to provide retail POS credit solutions, including flexible integrations to deliver higher basket values, reduced cart abandonments and higher sales. For more information please visit https://dividebuy.co.uk/.
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