Nearly two-thirds of retailers polled (64%) believe providing online financing options through their store is important to driving new and increased sales. 46% indicate it would decrease cart abandonment.
Instant financing is an easy-to-use, revolving line of credit that consumers apply for within a merchants online checkout.
It enables merchants to offer consumers the option to spread payments over time with low APR financing offers and provides an attractive alternative to credit and debit cards when paying for an online purchase.
It is particularly appealing to millennials, less than a third of which carry credit cards, according to a 2016 Bankrate survey.
The online study was fielded between January 2 and 23, 2018 by Researchscape International on behalf of Klarna North America (www.klarna.com). The survey of 263 US online retailers was designed to better understand their behaviour, implementation and attitudes regarding instant financing and its impact on their business. The roles of respondents ranged from manager to president. The credibility interval is ±9%.
The online retailers also rated the top three most important features of point-of-sale (POS) financing: simplicity of online application, speed of approval and keeping consumers on their sites during the approval process.
The merchant survey, which recognises the importance of instant financing among online retailers, corresponds with consumer attitudes as revealed in a Klarna-sponsored survey in 2017 that showed:
75% indicate a preference for online merchants offering instant financing;
39% would spend more money if given instant credit options when purchasing goods and services online;
28% would be very likely or completely likely to change merchants in order to use instant financing;
47% would like to be presented with an instant financing option while shopping online.
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