Point of sale (POS) finance is exploding in popularity. According to Apex Insight’s 2017 report, POS lending stands at over £4bn a year in the UK alone. By offering POS finance, retailers can boost sales, average basket size and customer loyalty. Realising this potential, PayPal entered the arena with an offering called PayPal Credit (PPC) which lets customers spread the cost of online shopping.
A year before PayPal’s announcement, Divido launched – offering flexible POS finance that allows customers to purchase at 0% interest whilst the retailer gets paid straight away. And here’s the thing – retailers using Divido over PayPal Credit can benefit from a number of advantages.
Here are six reasons why retailers are choosing to use Divido over PayPal Credit when it comes to offering customers POS finance.
1. Divido is connected to multiple lenders
PPC is a solo lender, meaning that it lends directly to customers. In contrast, Divido connects multiple lenders to each retailer. As a result of this variety, the chances of a lender approving your customers for finance is increased. With multiple lenders competing for the business, Divido can increase your chances of getting the best deal and converting more customers.
2. Divido works in more countries
If you’re a business with global reach, you need a customer finance solution with reach too. Currently PPC only works in 2 countries in Europe (UK and Germany) whereas Divido is adding 8 new countries this year alone, meaning you will be able to reach over 350m customers through one simple integration.
3. Divido offers true 0% APR
Read the small print and you’ll find that PPC offers interest-free ‘promotional credit’. Their actual APR is 17.90% and this needs to be advertised to customers prominently to conform to advertising rules. In contrast, understanding that consumers prefer 0% APR, Divido offers exactly this (though they also offer interest bearing and buy-now-pay-later credit options) – giving your customers what they really want.
4. Divido offers up to 3 years interest-free
In the UK, PPC only offers ‘promotional credit’ for four months. Divido offers interest-free for up to three years and interest bearing up to five years. A longer interest-free period makes it more convenient for customers to buy your products, and so maximising the chances customers will purchase from you.
5. Divido means you don’t have to get FCA regulated
Because PPC only offers 17.90% APR, you would have to become regulated by the Financial Conduct Authority (FCA), which can be an expensive and time-consuming process that distracts you from growing your business. Once regulated you will be responsible for ensuring that all your employees adhere to your licence, exposing you to fines if rules are broken. You also have to produce annual reports and pay annual fees to the FCA. With Divido you don’t have to do any of this, provided you offer 0% APR for 12 months or less.
6. Divido works for offline retailers too
PPC only works online. Divido works online, but also in-store and via the phone, so you can extend your customer finance offer to your bricks-and-mortar retail network, creating consistent online and offline customer experiences and making sure that you provide your customers with their preferred purchasing channel. And one more for luck…
7. Divido lets all of your customers apply for finance
PPC is only available to PayPal account holders. Not everyone has a PayPal account, but every customer has a bank account. By using Divido you maximise your chances of customers being able to obtain finance and buy from you, as well as removing any obstacles that could dissuade them from converting.
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Divido is a market leader in POS finance. Our multi-channel, multi-lender, multi-country approach gives you a clear advantage over competitors using other financing solutions, enabling you to provide flexibility and convenience to more customers and increase your sales as a result.
Written by: Kate Rogerson