Customer financing

Everything you need to know about instant customer financing

Instant customer financing creates a win-win scenario for merchants and their customers. Customers get to buy the items they really want right now and pay for them over time in installments, while merchants get to upsell to higher amounts and boost sales.  

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Unfortunately, many store owners are missing out on the opportunity to offer this solution and gain a competitive edge in the marketplace simply because they don’t know what it’s all about. 

What is instant customer financing?  

It’s a payment option that allows your customers to buy items and services now and pay for them later in equal monthly installments. It’s available for brick-and-mortar stores and ecommerce stores. 

Consider this the only instant customer financing overview you need to understand exactly why you should be offering POS financing online and in store.  

The basics of instant customer financing 

Picture this: A customer is in your store when a product catches their attention. Perhaps it's an item completely different than what they planned to buy or maybe it’s an upgraded version of what they came in for. Unfortunately, they look at the price tag and have to put it back on the shelf. It’s too expensive. They lose out on a product they love, and you lose out on the sale (or upsell). 

In one way or another, this scenario plays out in stores and online every day. Customers want to buy goods or services but don't always have to cash flow to pay for the purchase all at once. 

That’s where instant customer financing comes in. It allows shoppers to enroll in an affordable payment plan, so they can buy what they want now and pay later in equal monthly installments.  

Pretty cool, right? 

Instant financing vs credit 

Now, you might be wondering why someone would need or want instant customer financing. Couldn’t they just use a credit card or go to the bank for a line of credit or loan if they really wanted to buy an expensive item? 

This POS financing option is called “instant” for a reason. The customer doesn’t have to go to the bank to fill out an application and wait to see if they’re approved. On the contrary, they can apply in as little a2-3 minutes in store or on your website and know if they’re approved instantly, usually for up to $15,000. They immediately receive the credit to make the purchase. This makes the process faster and more convenient for the customer, which satisfies their need for instant gratification at the point of sale. 

The process varies depending on the financing company, but, typically, customers only need to enter their names, addresses, and telephone numbers to register. Then, they enter their credit card details or bank account information to get approved. Once they’ve registered, they never have to do so again should they request credit again in the future. 

 And while customers are typically charged interest on the financing, the rates are usually lower than that of credit cards. This makes it a more attractive option. Plus, with shoppers becoming more debt-averse, and rightly so, many people are foregoing credit cards altogether to avoid the debt that often comes with this payment method.  

Online and POS financing for customers 

One of the really cool things about instant customer financing is that it’s available both in store and online. You can get the app on an Android-based payment terminal like Poynt, so your customers can apply directly at the counter when they’re paying for goods.  

If you manage an online store too, the option can also be available to customers on your website. This allows you to not only increase conversion rates at both points of sale but also create a streamlined and consistent buying experience across sales channels.  

The benefits for customers 

In a recent study, 75% of people surveyed said they’d be more like to buy from a store that offered POS customer financing over one that didn’t. This kind of statistic makes it clear what shoppers want: choice, flexibility, and options.  

Customers want to pay using their preferred payment method. And many prefer to pay with financing.  


  • They get the buying power they need to purchase exactly what they want instead of having to compromise by buying a less-expensive item. 
  • They get to improve their cash flow by paying over time instead of upfront. 
  • They get approved instantly after a quick application process, directly at the terminal or online. 
  • Most financing companies offer an open-end line of credit, so customers don’t have to re-apply for new financing should they want to purchase again from you using this payment method.   
  • They typically get a better rate than if they paid with credit cards. 
  • They gain the freedom and flexibility to pay how they want.  

The benefits for merchants 

So, what’s in it for you? A lot, actually. The biggest benefit you’ll see is an increase in sales. Offering instant customer financing online and in store enables you to take the hesitation and price aversion out of the payment stage. When you give customers an alternative option to pay in a way that suits them (over time with monthly installments), you can help ensure they’ll feel good about their purchase and, therefore, make it more likely that they’ll follow through. In fact, in a recent study, 47% of respondents said they wanted an instant financing option while shopping online, and 40% said they’d spend more money on a purchase if they had this option.  

Plus, offering different payment options allows like financing you to attract different types of shoppers and cater to the needs of a wider audience, which can increase your customer base. You’ll be able to bring in customers that want to buy now and pay now, as well as those that want to buy now and pay later.  

Plus, not everyone shops with credit cards, and it pays to offer an alternative. By customizing the shopping experience to fit the needs of more shoppers, you can increase brand loyalty and encourage repeat purchases.  

So, we’ve determined that you can boost conversions by offering instant payment plans. You can improve online shopping cart close rates and POS close rates by offering more ways to pay. Your bottom line will increase as a result.  

What other benefits will you gain? 

  • Better cash flow: You get paid the full amount within 48 hours from the third-party financing company and don’t have to chase delinquencies (which you’d have to do if you offered financing yourself).  
  • You get to offer a seamless, fast, and convenient customer experience (that your customers will surely love).  
  • You’ll upsell more often: Customers tend to spend more with financing, so it stands to reason you’ll get more money per transaction when customers can buy the more expensive items and services they really want. 
  • You'll enjoy minimal involvement from staff: The application process is so simple that customers can manage it on their own with minimal help. 
  • There are no set-up fees: You only pay per transaction.  
  • You’ll future-proof your business and gain a competitive edge: You’ll be giving your customers an option few other merchants are offering, so you can ultimately stand out from the crowd.  

Is it right for you?  

While offering POS financing is a great option for many retailers, it isn’t for everyone. For example, if you sell low-priced items like pens or hairbands, your customers really wouldn’t have a need to finance their purchases. But if you sell high-value professional services or high-ticket items, then it might be the perfect addition to your payment lineup. In general, if you sell products or services costing over $1000, your customers might appreciate the option to finance. However, even merchants selling items for as low as $100 might benefit.  

Consider instant customer financing if you sell one of the following products or services (or something similar), whether online or in a brick-and-mortar store: 

Big-ticket items: 

  • Furniture stores 
  • Appliance stores 
  • Electronics 
  • Flights 
  • Cars  
  • Accommodations 
  • High-end clothing or cosmetics 
  • Jewellery 

High-value professional services:  

  • Field service 
  • HVAC 
  • Renovations 
  • Veterinary care 
  • Funeral services 
  • Dental services 
  • Accounting 
  • Auto service and repair 
  • Law services 

Ultimately, there’s a good chance that POS financing may boost your business’s reputation, revenue, and customer base, and you should seriously consider it if you sell the products or services described above.  


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Ben Smith

Ben brings 20 years of experience to his role as IT Director for BNA Smart Payment Systems. Among his many directorial duties, he is responsible for the selection, acquisition, development, installation, maintenance, and support of IT infrastructure. Ben also establishes and leads a cross-functional architectural committee, acts as a technical expert and a critical technical resource across multiple disciplines, and consults on all system implementation, modification and integration activities. He graduated with Honours from Durham Collage in Computer Programming, and takes yearly training courses for security and development technologies to remain up-to-date. Outside of work, he loves playing hockey and skating with his family, and also enjoys gardening and cooking.

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