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Best Platforms to Offer In-App Financing for eCommerce

| June 23, 2020

Unless the entirety of your customer base is incredible with money management, you might want to consider the need for in-app financing. Most of us make large purchases on credit, taking advantage of popular payment options like auto loans, mortgages, or our credit cards when buying an item or service that would otherwise make an impact on the amount of cash we’ve saved.

There are many times that eCommerce platforms, just like car lots, could make more sales for high-dollar items if there were additional payment options. Fortunately, the process today doesn’t necessarily require partnering with banks and other lenders in a traditional fashion. Here, we’re going to touch on how financing can help businesses then look at a few programs that can help turn prospects into buyers.

Converting viewers to customers

As a consumer, buying things that we want or need is usually based on the function of whether we can afford that “something.” But as a merchant, it’s not up to these businesses to decide whether or not an item is needed – the crux of any sale is ultimately making an item or service as sellable and accessible as possible.

One way companies accomplish this feat for services is by breaking down more expensive purchases and offering subscription-based payments, as WooCommerce describes for their platform. Many companies like Microsoft (namely, everything in the 365 family of products) sell products and services as subscriptions where fees are collected at regular intervals, either monthly or yearly. The nice thing is, for products and services that fall into this ecosystem, this is a common feature that can also be setup through payment systems like Stripe, Google Pay, and Apple Pay. 

While this works for some service models when recurring payments can be set up through a POS system (namely, with software and other digital goods) it’s not viable for everything.

How to offer in-app financing for your products and services

Let’s say you sell high-priced items on your platform (e.g. jewelry, furniture, etc.) meaning there’s a good chance your items fall just out of reach for your audience if payment is expected in full and upfront. Offering items “on the cuff” with a partial payment down and acting like a “buy here, pay here” car lot opens a can of worms that most businesses won’t want to deal with. Fortunately, there are better ways.

Financing is subject to legalities that convolute the process for in-house lending. However, it is entirely possible to tether a financing company into your system that can serve as a financing entity, thus enabling your products to reach a broader audience.

In-app financing options

There are several options available for eCommerce platforms to outsource financing – this enables your business to get paid and provides a cushion for buyers to pay off their products over a certain timeframe.

PayPal Credit. For customers that allow payment through PayPal, this inherently allows qualified customers to take advantage of the PayPal Credit program. PayPal offers a convenient and secure platform to process payments that protects both the consumer and seller. The auxiliary PayPal Credit program is underwritten by Synchrony Bank which provides customers access to a line of credit that can be selected instead of using a PayPal balance or linked bank account. Often times, there are promotions that provide customers with at least 6 months to pay off a purchase with no interest.

Snap Finance. The Snap EDGE program offered from Snap Finance allows retailers at brick-and-mortar locations as well as eCommerce platforms to provide financing for select products. Unlike some other solutions, Snap Finance works as a 3rd party solution where companies using this solution can operate the system through a web portal which provides flexibility to retailers, especially those that operate out of physical locations. Too, they offer an API that directly integrates a Snap Finance payment option for in-app financing. Retailers simply need to sign up with Snap Finance by filling out an application – once approved, the retailer can furnish financing for their customers through Snap Finance by either walking users through the web portal they can directly integrate a self-serve option on their website or app.  

Affirm. The Affirm platform for merchants provides customers an option to purchase items or services after applying through their system. This is perhaps one of the easiest systems to integrate as they offer a payment gateway for WooCommerce that installs like other plugins plus, they offer an API for custom integrations. Customers simply need to provide a few bits of information to get started – once approved, customers are given access to a credit line at anywhere from 0% to 15% (depending on the purchase and customer’s credit score) and monthly payment options. From here, your customers are able to make payments to Affirm either over the web or through the Affirm app until the debt is paid off.

Klarna. With the Klarna platform, businesses are able to setup an account as a registered merchant which opens the door to offer in-app financing to customers. Per Klarna’s estimates, their platform increases conversion by as much as 20% which is reasonable to assume to for other providers as well. They offer free plugins for WooCommerce, WordPress, Shopify, and Magento which enables businesses to integrate the Klarna checkout with just a few clicks or more custom integrations can be built using the Klarna API. After customers are successfully approved, customers simply need to manage their account through a web portal where they can check account information and make payments.

Blue Label Labs helps drive your conversion for business

We want our customers to be as successful as possible in their endeavors so for eCommerce, it’s a great idea to consider offering a financing platform to increase your conversion rates. Get in touch with us to learn more about our development process and how we can supplement your eCommerce platform with in-app financing.

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