Everyone into the pool

Historically, unsecured lending offers focused on small to mid-size purchases. Now, new point-of-sale services are available in more expensive categories. Customers are dictating the terms. Most have a credit card with sufficient credit to make these purchases, but they’re attracted by easier, cheaper payment terms. Given the costs of customer acquisition, companies are loath to say ‘no.’

High-margin categories with higher acquisition cost are more likely to subsidize point-of-sale financing.

To read the article, see “Buy now, pay later: Five business models to compete,” July 29, 2021.