The term ‘embedded lending (A.K.A consumer finance or BNPL) is referring to the solution that is integrated into the merchant’s sales processes which allow buyers to take home their purchase but pay for it over time. 















In the past, the “Pay later” payment option typically referred to credit cards or interest-free period following the purchase, during which no payments were made and no interest was charged. However, after this interest-free period, payment in full was expected otherwise the interest from the original time of purchase was added.



The term ‘Consumer Financing’ is when a business or retailer offer customer financing options to its customers using either their own funds or the funds of a lending company or bank. This allows the consumer to be able to purchase an item that they would otherwise not be able to, or may not want to pay for using immediate funds. The term is typically used to describe debt for everyday goods and services.



  Additional points:

•  ‘Consumer financing’ covers all point-of-sale finance, including credit cards and instalment loans or BNPL.
• Businesses of all sizes benefit greatly from offering consumer financing.
• Also referred to as ‘Customer financing’

New Paradigm

Wouldn’t it be great if the product and finance journey were personalised, flexible and a single branded experience? Stay in the same journey, the same look and feel- fully integrated.



Finance technology has revived the concept of ‘consumer finance, with modern versions much clearer about the payment and interest plan over the period of the loan and the direct integration into the customer experience.



The term ‘Consumer Financing’ is when a business or retailer offer customer financing options to its customers using either their own funds or the funds of a lending company or bank. This allows the consumer to be able to purchase an item that they would otherwise not be able to, or may not want to pay for using immediate funds. The term is typically used to describe debt for everyday goods and services.



  Additional points:

• ‘Consumer financing’ covers all point-of-sale finance, including credit cards and installment loans or BNPL.
• Businesses of all sizes benefit greatly from offering consumer financing.
• Also referred to as ‘Customer financing’

There are also two types of integrated BNPL solutions:

1. Merchant transaction fee loan – One type of point-of-sale loan does not charge the consumer any interest, instead charging the merchant a transaction fee. This interest-free solution is offered by companies such as Klarna, Splitit or AfterPay.
2. Shopper Interest loan – The other type of BNPL is a point-of-sale loan, where the consumer is offered an on-the-spot loan by a third party. The customer is able to receive the item right at that moment, but pay overtime, including interest. There is no charge for the merchant.

Why should merchant integrate consumer finance solutions?

For a retailer, offering consumer financing at the point of purchase can be crucial in converting passive browsers into active buyers. Therefore, it can boost sales and conversion rates. At the same time, it can promote customer loyalty and repeat business. Consumer financing encourages a customer to increase their order spend, allowing them the opportunity to spend more than they would be able to if they had to pay the balance upfront. 

What are the pros and cons of ‘Buy Now Pay Later’ for shoppers?

Shoppers – The advantages of consumer finance for Shoppers

 Ability to take items home right away and pay later, and sometimes pay no interest

• Potential to pay no interest if payments met on time or the entire amount is paid off by the time the loan period ends.
• A great option for unexpected or emergency purchases.

Merchants – The advantages of embedded consumer finance for Merchants

• Lowering and removing shoppers buying hesitations 
• Increasing average order value (AOV) and enticing shoppers to make bigger ticket purchases. 
• Increasing overall sales 
• Opening a new stream of income via loan interest
• Providing a holistic and pleasant branded customer purchase experience
• Financing shoppers with no need for another piece of plastic as is the case with a branded credit card.

 Key benefits:

• Boosts sales and conversion rates
• Promotes customer loyalty and repeat business
• Increases average spend

To convert more and grow your business, reach out to us at hello@jo1n.com

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