Point of sale financing allows for consumers to pay a certain percentage of the amount of product they buy over a period of time till they are able to reach the whole amount of their purchase. We’ve seen this method of paying in portions instead of all at once since the beginning of money related transactions. The time period in which the whole amount needs to be paid is also decided by the seller or lender of the product. Letting them keep the product till the sale is completed is known as the “open-loop brand credit cards” , Closed - loop store credit and retail installments loans. The point of sale finance method is not a very secure way of making a sale as the product goes in the hand of the consumer without them having given the full amount. However, there is a rise in the demand of this method of lending. When sales financing is combined with eCommerce purchases, there is a very good investment opportunity that opens up for financial companies.
Why use it
People have taken a liking to the method of online shopping over the last decade or so. They are constantly making purchases. The online shopping apps provide them with an emi option on their products where the point of sale financing is used. They are allowed to have the product and pay in installments over a given period of time in order to attain full ownership of the purchased product. The cloud based solution to point of sale financing gives merchants and lenders to customize a payment plan as per their own wish for their customers. This can happen in both in store and online purchases.
Method
The workings of this method aren't very complex. When one is at the checkout after selecting the product they wish to purchase, he/she/they select the payment method. The cloud records the information of the customer from their account ID and passes it on to the sellers. The seller then decides whether or not the loan could be put forward. Then he/she assigns the time period and the installments begin.