It’s no secret that many consumers have lost trust in financial institutions, especially millennials. This is underscored by the fact that the people in the age bracket of 25-35 years old carrying credit card debt is at its lowest since 1989.A recent survey conducted by Affirm, the financial service brainchild of PayPal co-founder Max Levchin, found that 64% of respondents worry about the final cost of items bought with credit due to a history of deceptive practices in the industry. In fact, more than half also said that the uncertainty of the final price—due to interest and unclear terms—made them enjoy their purchase less, which is never a good thing for a retailer. But is this reason enough for merchants to abandon financing? Absolutely not. It is, however, reason for merchants to look at more modern financing options that appeal not only to the millennial buying power, but to the masses.
Why are financing options important?
- Reduces sticker shock with “as low as” terminology
- Drives conversion
- Increases average order value (AOV)
- Reduces occurrences of abandoned carts
However, with the general distrust in bank credit cards and financing options, companies such as Affirm have found a way to offer a more trustworthy, transparent and modern take on financing options. The solution reaches more shoppers as it looks beyond the standard FICO score, opening your business to a larger market previously under-served by the credit industry. It only takes a few seconds to gain approvals and does not require pages and pages of forms to complete, discouraging cart abandonment.
Why are financing options through Affirm important to merchants?
- Lowers risk - zero chargeback liability
- Merchants get paid the next day
- Higher Conversion rates - Purchases using Affirm convert 20-25% higher than standard card products
- Increases the average purchase size by 31-84% depending on the industry
- Increases your target market by being available to those previously not qualified for financing
To further appeal to millennials and our tech-heavy world, Affirm is built with a simple and easy checkout process, optimized for all access types, whether desktop, mobile phone or tablets. And now, for NetSuite dependent merchants, Solupay integrates Affirm with NetSuite so your consumers can checkout anywhere, right from within Solupay for NetSuite SuitePayments. Modern and transparent financing is crucial to some larger ticket industries, such as furniture sales, but even smaller ticket retailers can easily take advantage of the offering to increase cart size. In the previously mentioned survey, not only did 86% of the respondents overwhelmingly say they like having more control over their finances due to the transparency offered by Affirm, but 9 in 10 also enjoyed their items purchased with Affirm more. And this is reason for any merchant to look into modern financing options.