What does “Consumer Financing” mean?

Consumer financing, also known as customer financing, refers to a business or retailer offering 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, and it encompasses a wide range of products like installment plans, revolving credit, and Buy Now Pay Later (BNPL) solutions.

Why should I offer consumer financing?

Businesses of all sizes benefit greatly from offering consumer financing. Offering flexible payment options empowers consumers by enabling them to complete larger purchases they might otherwise have postponed or abandoned. It also fosters long-term customer satisfaction and loyalty.

Beyond that, consumer financing is also a powerful tool for converting passive browsers into active buyers. The ability to spread out payments can encourage customers to increase their order spend, allowing them to purchase items they would not be able to afford if they had to pay the entire balance upfront.

Key benefits:

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

What is a multi-lender solution in consumer financing?

A multi-lender solution is a system that provides merchants with access to a network of different financial institutions, all from a single integration. This approach is a key component in the context of consumer financing: instead of a merchant relying on a single lending partner, the platform connects them to multiple lenders at the point-of-sale.

Jifiti’s embedded lending platform, for instance, uses an intelligent waterfall technology, where a consumer’s application is automatically passed from one lender to the next if it is declined, ensuring a wider range of loan options and a higher chance of approval.

The multi-lender approach offers significant advantages over relying on a single lending partner. By leveraging a diverse network of lenders, businesses can greatly improve their consumer financing program.

• Higher Approval Rates: An application declined by one lender can be automatically passed to another, significantly increasing the likelihood of an approval.
• Wider Range of Options: Merchants can offer consumers a more diverse selection of loan products and terms, appealing to a broader customer base.
• Competitive Rates: The competition among multiple lenders on the platform can lead to more favorable interest rates and terms for consumers.
• Reduced Risk: The merchant is not dependent on a single lender, reducing the risk of being impacted by a partner’s changing policies, rates, or technology.