Lack of consumer finance options costing UK businesses £25bn
UK businesses could be losing out on over £25bn in potential sales by not offering a range of consumer finance options, according to new research.
The findings were published in a report by specialist lending platform, Duologi, which looked at the current state of the consumer credit market and attitudes towards point-of-sale (POS) finance across a number of sectors. POS finance allows merchants – from retailers to health providers and travel companies – to offer their customers a loan to purchase a product or service.
The study, “Finding the right balance: the future of credit” revealed that more than three-quarters (78%) of consumers would consider purchasing through POS finance in the future – around 39million UK adults.
Of these, the average amount that each would be willing to borrow is £620, representing a potential £25bn sales opportunity for merchants that implement this type of payment into their business model.
Consumer spending behaviour is also likely to favour merchants that offer POS finance options – helping to boost sales and reputation in a number of key ways.
Over a third (34%) of people said they would be more likely to spend with a business that offers POS finance options. With fierce competition throughout every sector as the UK economy fluctuates in confidence, this potential to boost traffic (both online and in-store) could be critical to a brand’s survival.
Customers also stated that POS finance options would be a key factor in deciding where to shop; 20% of people said that if a company didn’t offer flexible finance options, they would be more likely to go elsewhere.
Moreover, finance options can help to boost brand loyalty, with more than a quarter (28%) of people saying they would be more likely to return to a merchant that allowed them to borrow funds in this way.
A further 26% of people would be likely to spend more than originally planned if they found they could access a good amount of credit from a merchant.
Duologi co-CEO, Gary Little, commented:
“Consumers are now more willing and able to borrow funds than ever before and as such, are demanding increasingly competitive credit options from lenders. There is clearly an enormous opportunity available for UK businesses to drastically boost bottom lines; one which many may not even realise they are missing out on.
“Fintech businesses are driving a transformation in the market. Whereas previous incarnations of consumer finance offerings may have been plagued by lengthy application processes or slow procedures, new platforms – built on powerful technology – are making this kind of transaction just as simple as paying on credit card, but with the flexibility to repay the cost in a way that suits customers’ needs.”
Duologi is led by co-CEOs, John Taylor and Gary Little, who between them count more than 50 years’ consumer lending experience at institutions such as Barclays and Close Brothers. Backed by global investment firm, Oaktree Capital, the company offers merchants the chance to increase their sales, boost customer satisfaction and grow profitability through the delivery of tailored point-of-sale finance options.
For the full report visit https://www.duologi.com/Duologi_FindingTheRightBalance_5b4_5d-1.pdf