Five common Point of Sale financing mistakes retailers should avoid in 2025

Nowadays, if a retail business wants to be successful, the decision-makers need to take a lot of factors into consideration. Shoppers expect a high quality experience with a personalised approach and lots of payment options. This makes PoS (Point of Sale) financing an integral part of generating revenue and improving customer satisfaction rates.

Nevertheless, not so many merchants meet the buyer's demand when it comes to PoS financing. More than 75% of businesses admit that this feature should become one of their biggest priorities in the upcoming year. Let’s review the five most common PoS financing mistakes businesses should avoid in 2025.

What Is Point of Sale Financing?

Not many people would apply for a loan specifically to buy a certain item or gadget. Nevertheless, many shoppers are likely to use a Point of Sale financing option when they're already skimming through the shop's products online. Classic lending options include payday, business, and student loans, as well as a variety of others that you can apply for at digital lending sites like LendUp, Upstart, Upgrade, LightStream, etc.

Point of Sale financing, on the other hand, provides a flexible payment option on-site, in-store, or even via a call centre. If a buyer chooses this option, they can purchase the item in smaller payment installments over a period of a few weeks or even months. There is also an option for bigger purchases in the form of a longer-term installment loan.

Five Common PoS Mistakes to Avoid This Year

Point-of-sale financing offers plenty of opportunities for businesses to maximise their sales. Pay-over-time services can significantly boost revenue while enhancing customer loyalty. Still, there are a few mistakes companies need to be aware of.

1. Working With Just One Lender

All shoppers have different credit profiles, hence, merchants need to collaborate with a variety of lenders to meet the demands of a versatile customer base. As a rule, lenders have specific geographical coverage or they may only work in a certain region, district, or state.

They can also cater to specific customer segments, and that will ultimately make them unsuitable for a certain category of buyers. If a customer can't have a good deal with a lender using the retailer's site, they will likely back out from the purchase and may even look for another merchant altogether.

2. Customers Experience a Fragmented Service

More often than not, merchants fail to provide a streamlined lending experience for the customers. This becomes especially obvious when retailers integrate a few lenders into their offer. Imagine a buyer who is making a purchase and goes for one of the loan options, but it gets declined at the end of the purchase process.

Even if you offer more lending options, the customer will have to start the application process all over again and that may lead to dissatisfaction and frustration, up to the point where the buyer may drop the purchase altogether. It's best for merchants to use a single platform for all their financing options to provide a smooth and stress-free experience for their customers.

3.  Failing to Provide an Omnichannel Experience

All customers have different preferences when it comes to shopping. Some people prefer buying things online, while others love to do window-shopping in person and then finalise their purchase via a phone call or using an app. No matter what option they choose, the merchant needs to provide a stellar omnichannel experience, including when it comes to using PoS financing.

Some people can make big-ticket purchases in one go, yet others will rely on point-of-sale financing to do that. They can make the purchase online and then finalise it inside a physical store. If a merchant wants to provide a seamless experience at every point of the customer journey, they need to make PoS financing options available everywhere - online, in-store via QR codes, and inside the app as well.

4. Having Many Lenders Without a Platform

Merchants need to use a centralised Point of Sale platform to provide a stress-free experience for their customers. Adding more lenders can create confusion and issues with operations like managing disputes and paying out refunds.

When each lender works separately, it's increasingly hard to coordinate their activities, especially when you operate on a large scale. When there's a centralised system it becomes much easier to track payments and avoid potential discrepancies.

5. Ignoring Customer Financing Data

Whether merchants want to increase their sales or improve their products and services, gathering customer financing data is a must. It will also help identify upselling opportunities and improve marketing strategies, making them relevant to the current trends and customer demand.

Analysing shoppers' financing data also gives merchants insights into their purchasing habits to create more efficient marketing campaigns in the future. Business owners can also personalise their approach, offering buyers more lucrative financing options that suit their customer behavior the most.

Conclusion

In this day and age, customers expect to have a seamless experience when it comes to online and in-store shopping. Point of Sale financing gives customers a flexible payment option that, when executed well, can become the breaking point in their decision to buy this or that item.

PoS financing allows buyers to break down the total cost into smaller amounts of money they can pay over a period of a few weeks or months. Merchants need to remember that working with only one lender can cause issues for shoppers that don't match the lender's customer profile.