Remember the time when you had a limited number of ways to accept payments from your customers? There was cash, of course, and sometimes check and the major debit and credit cards.
Customers would have difficulty finding the right amount of cash, write a check, or give them your card while the other customers stood in a queue, annoyed at having to wait for so long.
Cut to 2020, and the digital revolution has changed the world. With the advent of cloud computing and smartphones, you can have Point of Sale (POS) financing for your small business.
Be it unsecured loans, lines of credit, or credit cards – POS comes in many shapes and forms, allowing you to offer customers the best home improvement financing service.
However, the question you might have at this point is, is it worth it? Should you also adapt to this new model for your small business?
Yes, it’s a tough decision, but by the time you finish reading this blog, you will have the answer.
What Is POS Financing?
Before we jump into the intricacies, let us take a moment to understand what POS financing is in the first place.
POS financing is a new financial model that is a form of personal loan. The loan is given to a consumer to pay for any kind of purchase, including mobile phones, furniture, electronics, and many more.
In POS financing, a consumer who buys a single product can get finance from the lender.
The key difference from having a credit card is that with a credit card, a consumer can get finance no matter which product he or she is buying. In addition to that, these loans are provided on the spot without any delay.
At this point, you might think POS financing is exactly what a personal loan is. However, unlike a personal loan, the lender knows why the consumer is taking the loan in POS financing.
Not only that, the consumer does not need to submit an application to get this kind of loan.
Benefits Of POS Financing
To make sure anything worthwhile for us, we must ensure it comes with some pretty sweet perks, right? Let’s look at some benefits that POS financing has to offer your business.
Additional Payment Options
Think about this scenario – a customer walked into your store, bought quite a few things, and came to pay for them.
He is not carrying any cash with him, and yet the only payment you can accept is cash. The customer might choose not to visit you ever again.
As you can see, when you only accept cash, the growth of your business gets affected. Nowadays, quite a few people do not carry cash with them and rely on online payments.
You would not want to lose them all, would you? So, when you have POS financing, you expand the number of payment options for your customer.
This, in turn, will make your customer happy with your services, and he or she will come back to you again and again. A returning customer means more sales.
People love to wait in a queue only when they are in the store of a big brand. They consider it a status symbol.
However, the same would not be the case for you. If you are reading this blog, you are a small business owner. For you, long queues are a bad sign.
It is an indication to your customers that you do not know how to run a business, and they should not come back to you.
That is where POS financing can come to your rescue. The instantaneous loan approval method of this system lessens the time a transaction takes.
Therefore, the queues will be significantly shorter, resulting in both faster sales and happy customers.
The Choice Of Millennial Consumers
Millennial customers have a strange relationship with the term ‘credit.’
On the one hand, they are reluctant when it comes to having a loan or a credit card. On the other hand, they have the desire to spend lavishly on some occasions.
These consumers do not want to take loans in general but would not mind one on some special occasions which they care about. That is the reason finances such as cosmetic surgery financing are so popular among them.
POS financing offers them a way out, where they do not need to go through lengthy and tedious processes of applying for a personal loan and still get the credit.
Allows Customers To Buy Expensive Products
Customers – especially the younger ones – might not have a massive amount of money present with them at all times.
When you only have cash and credit card payment options, it prohibits them from buying a product that might have a higher price tag attached to it.
When you have POS financing available on your business, your customers can buy the products they want to without any hassle. As a result, you get increased sales along with satisfied customers.
A Broader Customer Base
POS financing can widen your customer base in a couple of ways.
On the one hand, the people who do not use cash and rely on the POS financing model will become your loyal customers once you offer it as a payment method.
On the other hand, many customers who cannot have a credit card can avail of this payment method as well.
The reason behind it is only people with a certain credit score can get credit cards. But POS financing is available for almost everybody. This, in turn, the number of potential buyers from your business increases.
For example, there are many students who cannot have a credit card or pay a lump sum amount to buy high-end smartphones or gadgets.
However, with POS financing, they can do it just by giving monthly instalments.
With the business world changing along with daily life, POS financing is the way to go. It can positively impact sales in your small business and help you to have more revenue.
Thus, you should embrace POS financing and use it to see rapid growth in your business.