Insider Spot

Business Resource Center

Welcome to Sekure Merchant Services Business Resource Blog

All Posts

POS Financing Overview: Benefits & Cost for Businesses

Installment loans are nothing new—consumers have been using them for decades to finance big-ticket purchases like appliances, furniture, and electronics. But fintech companies have brought POS financing to the younger masses with flexible products; indeed, the process is now more seamless than ever and gaining traction. As a merchant, should you jump on the POS-lending bandwagon?

What Is POS Financing?

Point-of-sale financing is a process by which merchants offer customers a way to pay for a product—in-store and online—using a third-party lender. It allows consumers to break purchases into installments, with set interest rates and repayment schedules, while the merchant receives full payment as they would with a credit card. This payment solution was already trending upwards before the pandemic and, like many other emerging retail trends, has only accelerated since COVID-19.

A Growing Industry

The POS lending sector is growing exponentially. Between 2015 and 2019, outstanding balances originating from POS lending solutions more than doubled. The space has gained visibility and acceptance, while the application process continues to improve. Furthermore, the industry is starting to grab market share from credit card companies, snatching 3% during the same period.

The Players

Some of the industry’s heavyweights include Affirm (which has partnered with the likes of Peloton), Afterpay, Sezzle, and Klarna. They all work on the same premise, namely buy now, pay later. For an eCommerce purchase, the typical process looks like this:

  1. Customers add an item to their cart.
  2. They choose the POS lender option during checkout.
  3. Customers log in (or create an account) and wait to be approved.
  4. Payment is broken up into chunks (usually four) and is payable over a given period.

Should Your Business Offer POS Financing?

POS financing solutions have their pros and cons, and they aren’t for every merchant.

Benefits include the following:

  • Higher sales volumes
  • Higher conversion rates
  • Higher-order values
  • Lower fees

In terms of disadvantages, there is always the risk of a customer being declined at the checkout. Likewise, there are setup and training costs associated with any POS financing solution.

Here are a few additional considerations:

Cost. Before implementing a solution, do some research on the costs. For example, you’ll have to train your employees and integrate the platform into your eCommerce channels. Also, there are ongoing costs associated with partnering with a POS lender.

User-friendliness. Whichever offering you choose, the entire lending process needs to be seamless. A cumbersome loan application and checkout process will frustrate customers and be unlikely to add value to your business.

Loan terms. Team up with a provider that provides the most favorable terms and pairs with your products or services. Interest rates and payment late fees vary between lenders, with some offering interest rates as high as 30% and fees for late payments.

If you have partnered with a POS lender or are thinking about it, consider integrating the offering throughout your site. According to a McKinsey report, merchants that integrate a financing option throughout their website and not just at checkout saw a 3.2% increase in conversion rates. The same report notes that 75% of consumers who decide to use POS financing for big-ticket products make the decision to do so well before checkout.


Partnering with a POS lender is worth considering, especially as consumer awareness of POS financing continues to increase. Although there are some drawbacks, POS financing is here to stay and is poised to keep growing. If you’ve got any questions about integrating POS financing into your business, get in touch with a Sekure payments professional today, and they’ll be happy to guide you through the process.

Tom Haney
Tom Haney
Tom Haney is a writer, translator, and editor. In addition to toiling in the communication field, he also works in the forest on his side-hustle, Sweetbark maple syrup. He lives in Centretown with his wife, daughter, and pooch, Louie.

Related Posts

Five Ways Travel Agents Can Help Clients Navigate Today’s Trends

Although the travel industry’s 2021 recovery continues, the Skift Recovery Index (which provides up-to-date performance measures of the industry across 22 countries) shows that travel is still languishing 35% below pre-pandemic levels. The recovery has also been uneven, varying between different geographical regions due to divergent travel restrictions, COVID-19 case counts, and vaccine rollouts and the relative strength of their domestic travel markets.

Pasco Golfland: Continuing A Family Legacy

Small businesses, especially family-run businesses are the cornerstone of American life. Here at Sekure, we love highlighting the family businesses we serve, one of them is Pasco Golfland. 

10 Easy Marketing Tips to Increase Your Black Friday Sales

Whether it’s standing outside in the rain and snow for hours, cramming into stores or shopping from their beds in the wee hours of the morning to shop online, customers are always on the lookout for the best deal. Experts suggest Black Friday’s retail outlook will be different this year with fewer product selection due to hampered global supply chains, but retailers and other businesses can still make the most of this long weekend. To do so, you’ll need to find a strategy to help attract and delight your customers. Since Sekure works with a wide-range of businesses, we prepared a list of 10 marketing tips to help you grow your business for holiday shopping 2021, no matter the industry.