What is Embedded Lending?
Seamless Credit Options: It's when loan or credit choices are offered at the point of purchase (in-store, online, or within an app).
Examples: This could be a new credit card offer during checkout, buy now, pay later (BNPL) options, or a loan offer via your banking app.
Key Findings:
High Consumer Acceptance: About half of shoppers who encounter embedded lending are highly satisfied, with 75% being open to considering it.
Loyalty Boost: 43% of consumers would switch merchants for access to embedded lending.
Increased Spending: In some cases, consumers are willing to spend more when using embedded lending:
Education: 88% increase
Medical: 28% increase
Home Improvement: 70% increase
Why the Spending Increase?
Embedded lending likely makes consumers feel more comfortable tackling larger or unexpected expenses by spreading out payments. This eases short-term financial pressure.
Implications:
Merchant Opportunity: Embedded lending can attract customers, increase loyalty, and boost sales due to higher average order values.
Financial Institutions: Offering these options can broaden their customer base and revenue streams.
Overall takeaway: Embedded lending is a win-win for both consumers and businesses. It provides shoppers with convenient financing options while driving growth for those who offer it.
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