In today's fast-paced and highly competitive retail landscape, businesses are constantly seeking innovative ways to enhance the shopper experience and provide added value to their customers. One approach that has gained significant traction is using a multi-lender network. We live in a world of customer diversity, different shoppers with different credit profiles, so why offer them a one-size- fits-all BNPL solution?
Multi-lender waterfall lending refers to the intelligent routing of a customer's application from a primary lender to secondary lender, with the goal of maximising approval rates for financing. It goes beyond being a simple marketplace for lenders, as it is a comprehensive solution specifically designed to enhance customer acceptance rates. This solution empowers merchants to optimise their customer conversions and boost sales through a tiered financing approach. By partnering with multiple lenders and offering a diverse range of financing options, retailers can elevate the shopper experience and create a more inclusive and flexible buying environment. In this blog, we will explore the benefits of a multi-lender network and how it empowers both businesses and consumers in the pursuit of their shopping goals.
What types of lenders are in a multi-lender BNPL platform?
Prime lenders typically prioritise borrowers with excellent credit ratings. On the other hand, secondary lenders are more inclined to approve near-prime borrowers, who typically have credit scores that are less than perfect.
What is the difference between single-lender and multi-lender POS financing?
In single-lender point-of-sale financing, the customer's BNPL (Buy Now Pay Later) application is solely directed to one lender. If the lender declines the customer's financing request, the consumer is then required to reapply with another lender. Reapplying for financing entails the potential for an additional credit inquiry, and a negative financing experience can discourage the consumer from completing the purchase. On the contrary, multi-lender provides customers with a greater opportunity to obtain financing approval without the need for reapplication. Ultimately, this results in increased sales for the merchant. This not only provides a greater sense of control but also simplifies the decision-making process, making it easier for customers to navigate their financing options and proceed with their purchase.
Increased approval rates and repurchase rates.
Another significant benefit of a multi-lender network is the increased likelihood of approval for customers. Each lender in the network may have different approval criteria, allowing a broader range of individuals to qualify for financing. This inclusivity opens doors for customers who may have previously faced challenges in obtaining credit, providing them with the opportunity to make desired purchases and improve their overall shopping experience. A negative financing experience with a brand can leave a lasting negative impression on shoppers, decreasing their likelihood of returning to that store for future purchases. Conversely, a positive financing experience, especially when the BNPL solution is customised with the merchant's brand, enhances customer satisfaction and trust, ultimately strengthening the merchant's brand equity. Merchants can elevate their customer experience and increase customer repurchase rates by offering a multi-lender solution. This solution not only provides higher approval rates but also fosters positive customer interactions with the brand. As a result, customers are more likely to make repeat purchases, benefiting both the customer and the merchant.
Flexibility and customisation.
A multi-lender network offers unparalleled flexibility and customisation for both customers and retailers. Customers can choose from a variety of financing plans, such as instalment payments, zero-interest options, or deferred payment plans, based on their preferences and financial capabilities. This flexibility empowers shoppers to make purchases that align with their budgets and lifestyle needs, enhancing their satisfaction and overall shopping experience. Competitive advantage of retailers shopping cart abandonment is a real issue that online business owners are facing. According to Forbes the latest estimates put the cart abandonment at 75% Forbes.com. There are many reasons to why this is so high, unexpected fees, confusing checkouts, or shoppers simply not having the option to finance their purchases. Since payment options are important to consumers, having more options at checkout can really make a difference to whether they take the final steps of purchasing.
For retailers, incorporating a multi-lender network into their business strategy can provide a significant competitive advantage. Businesses can attract a wider customer base and differentiate themselves from competitors who may offer limited or traditional financing methods. This expanded reach opens doors to new market segments and drives customer loyalty by showcasing a commitment to meeting diverse financial needs.
Building stronger customer relationships.
A multi-lender network not only improves the shopping experience but also fosters stronger relationships between retailers and customers. By offering flexible financing options and demonstrating an understanding of their customers' financial realities, businesses can build trust, loyalty, and long-term partnerships. The ability to provide tailored solutions that cater to individual needs creates a personalised and positive shopping experience, leaving customers satisfied and more likely to return for future purchases.
In conclusion
In an era where consumers expect convenience, flexibility, and personalised experiences, a multi-lender network has emerged as a powerful tool for retailers to elevate the shopper experience. By partnering with multiple lenders and offering diverse financing options, businesses can streamline the financing process, increase approval rates, and provide customers with the flexibility they desire. Moreover, a multi-lender network gives retailers a competitive edge, expands their customer base, and cultivates stronger relationships. As the retail landscape continues to evolve, embracing a multi-lender network can prove instrumental in meeting customer expectations, driving sales, and fostering long-term success in the dynamic world of retail.