With the amount of choice now available in the consumer finance space, it’s necessary to acknowledge the main distinguishing features between the various solutions. Fintech solutions for POS (Point of Sale) loans can be a single lender, either because they are providing the finance themselves, or the platform is connecting the consumer to a single lender. Alternatively, the platform can connect the consumer to a wide range of lenders. Whilst this might not alter the experience for the customer themselves, it can directly affect the success of the retailer’s consumer finance program and how satisfied they are with their solution.

POS financing solutions often involve a large investment with the retailer, incorporating complex integration with the retailer’s POS system, and further consolidation on the backend between the retailer and the lender. Due to this heavy investment of time and resources, the retailer feels that it’s impossible to pilot any other options, which can then impede their ability to innovate within their own consumer finance solution, offer advanced experiences or seek out better pricing for their loan program. 

Jifiti’s zero-integration platform, allows many lenders to operate simultaneously within a ‘waterfall’ structure. Retailers can choose to work with more than one lender, update their program at any time and pilot new lender programs. Additionally, Jifiti can easily onboard our retailer’s preferred lender onto the program.

Single lender vs multiple lenders

A single lender consumer finance solution tends to use underwriting terms that focus on a single credit profile. For example, if the lender focuses on ‘prime’ borrowers,  they are looking at lending to people that have a near-perfect credit rating, high income, and very little debt. This is reasonable since this is the group that is most likely to be able to pay back the money, however, it means that only the top 30% of applicants are approved. For the retailer, that means that 70% of customers have their loan application rejected,  despite some of them having the potential to be valuable borrowers who will pay back their loan on time. It’s likely that these customers will then abandon their cart and shop elsewhere.

By having more than one lender offering consumer finance to customers, the retailer can achieve a cascading effect of lending to customers. If the first bank is not able to accept an application from a customer, the next lender will have slightly different underwriting which allows for lending to customers who are near-prime, and so on. This flow occurs within a single branded application, ensuring that the customer only needs to put in their details once to get results from either the primary or secondary lender and so on. 

This means that far fewer customers are rejected for consumer finance. All the options become available on the customer’s handheld phone or device in a matter of seconds.

On Jifiti’s platform, each lender can tailor-make their loan program towards the specific retailer and use case. This ensures that loans are not offered as a ‘blanket program’ given to everyone indiscriminately, which typically has a very high-interest rate in order to cover the lender’s risk.

The simplicity of Jifiti’s platform allows the retailer to offer its customers many more diverse consumer finance options. The result for the retailer is a reduced amount of cart abandonment and a higher conversion rate as customer loyalty increases. 

More information about our consumer finance for retailers can be found here.

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