Consumer credit services gain sophistication with new technology, programs

HIGH POINT — While credit is getting tighter, the process of securing it has become easier for most customers.

That’s the assessment of several consumer credit specialists, who also advise furniture retailers to take full advantage of what their credit partners have to offer.

So, how can retailers get the most out of collaborating with their consumer credit financing partners?

These credit specialists talk about some of the most useful programs/tools that they offer their retailer clients to help them promote their products and services, as well as further innovations coming in the future.

Henry Chionuma, vice president of business development for Fortiva Retail Credit, reports that Fortiva uses proprietary data and analytics to implement creative consumer financing acquisition campaigns and strategies that its partners can use, that exceed less-than-prime consumers’ expectations.

“Technology is at the core of everything we do,” he said. “User experience and design are critical, and we are always identifying opportunities to enhance existing apps and customer service tools to ensure an improved experience. Continued investments in data science results in better identification of cardholder behavioral trends to ensure improved engagement.”

Fortiva creates custom programs for its retail partners, including integrations with the merchant, waterfalls from a prime issuer, or credit via a third-party platform. Thus, Fortiva is well-positioned for a year in which, Chionuma said, demand for financing is likely to hold steady or increase.

“Higher funding costs and potential late fee changes are apt to result in tightened prime lender underwriting, presenting additional challenges for the underserved and underbanked to access credit,” he concluded. “The Fortiva Retail Credit program is well-positioned to include offers to consumers which prime providers have historically approved but might now decline.”

Smoothing the process

At Versatile Credit, President and COO Vicki Turjan employs embedded lending technology that allows merchants to offer a standardized, repeatable process featuring full-spectrum consumer financing at point of sale.

“With Versatile, retail staff can launch applications or process transactions from a single, centralized portal,” she said. “Shoppers can receive messaging online or in-store about the availability of promotional financing.”

Versatile Credit’s network includes nearly 40 lenders, tailored for every credit profile, Turjan said. The application process can be made available to shoppers in multiple engagement access points, ranging from tablets, desktops and dedicated kiosks, to the customer’s own mobile device.

“Versatile also provides merchants with detailed real-time analytics, so they can understand the performance of their financing operations across all lenders and channels in a single location,” she said. “Merchants have insight into program performance on a variety of levels, ranging from corporate, and regional, and store levels, to individual associates.”

These analytics may become more important, Turjan noted, as higher-income individuals seek financing options.

“The broader acceptance of financing across different types of purchases, coupled with the effects of economic factors like inflation and wage stagnation, suggests that we’ll see more consumers opting for financing solutions in 2024,” she said.

Customized solutions

Danielle Vincent, head of retail card services at TD Bank, said that by better understanding their partners’ established path to purchase — both online and in-store — TD can develop customized solutions that enable both the retailer and customer to appreciate the value of financing early in the decision-making process and use it to enable purchases, reduce friction, build loyalty and increase ticket size. That idea lies behind many of the programs and tools TD offers.

“These tools span UX strategy, integrated marketing campaigns, point-of-sale support materials, associate training and beyond,” Vincent explained. “We also offer partners access to our business portal, where they can access sales reports and other insights.”
TD works with its retailer partners to develop joint financing-centric marketing plans and promotional calendars, Vincent added.

“We have a robust internal marketing platform that allows us to create incremental cardmember engagement through multiple channels including email, direct mail and billing statements,” she said. “Customers can scan a QR Code to apply directly from their smart device in-store, making the process fast, easy, and private.

“We recently rolled out an entirely new Cardmember Lifecycle Journey that includes behavior-based emails deployed by TD. We work with specialized agencies to offer highly targeted campaigns for new movers, major retail events, and seasonal shopping trends.”

Customer satisfaction

In today’s fast-evolving market, constant innovation is essential for staying ahead and building enduring brand loyalty, noted Curtis Howse, executive vice president and CEO for home and auto at Synchrony Financial. His company, he said, prioritizes frictionless interactions and customer satisfaction at every touchpoint.

“Beyond discounts, our loyalty programs offer tailored rewards to boost engagement and drive revenue,” Howse added. “We have collaborations with point-of-sale vendors, API developers and web service integration partners to help us drive innovation.

“Since small businesses play such a critical role in the economy and face unique challenges, we recently launched the Synchrony Small Business Learning Center, which helps our smaller business partners to operate and grow their ventures effectively,” he said. “The platform offers industry-specific courses, videos, games and interactive experiences covering topics such as sales techniques, compliance and customer service.

“It also includes a user-friendly dashboard, countdown clock for course deadlines and links to a full content library.”

Accessible through Synchrony’s online Business Center, the Learning Center consolidates financing activities and learning resources, streamlining processes for small merchants and dealers.

“Our most recent Major Purchase Study found that 5% more people are obtaining financing for large purchases compared to two years ago,” Howse noted.

Building repeat customers

Through Concora Credit’s point-of-sale technology integrations and direct-to-device application access, customers need only apply once, thus conducing to repeat transactions, reported Ed Haluska, head of SMB Strategic Partnerships at Concora Credit (formerly known as Genesis).

“Moreover, our proactive communication strategies keep customers engaged and informed about their credit relationship, which reinforces the bond between them and the merchant,” Haluska said. “We harness the expertise and resources of other industry leaders to enhance our offerings. We continually enhance our products to serve customers and partners better.

“Our ongoing efforts include a ‘soft-inquiry’ application process tailored to include all demographics,” he added. “We’re collaborating with Prove to strengthen our fraud detection capabilities, and new innovations in our underwriting system include additional data attributes, by industry, with the goal of delivering more robust approval rates.”

In furniture financing, Haluska feels optimistic about sustained consumer demand. Accordingly, Concora has been expanding its alliances, including a strategic partnership with Upbound Group that has culminated Acima Private Credit, a fusion of Concora’s second-look financing expertise with Acima Leasing’s lease-to-own capabilities.

“What makes Acima Private Credit truly exceptional is its focus on empowering SMB (Small Medium Business) merchants and their customers with choice,” Haluska said. “This program will offer a seamless application process for both products and allow traditional LTO consumers who have improved their credit profile to be automatically approved by Concora Credit.”

Forging customer, retailer links

Ryan Slobodian, executive vice president of Snap Finance, said his company offers several particularly useful tools to its retailer clients.

Its Store Locator tool drives shoppers to retailers in their area. Snap Partners can also personalize their Store Locator page with company information, store hours and promotions or sales. In addition, Snap provides seasonal and general social media assets to Snap Partners through its Merchant Portal.

“SnapBack directs customers back to the store where they were approved to use any remaining, approved funds,” Slobodian said. “If they don’t use their full approved amount, they can return within 30 days and apply the remaining funds. This gives the customer more flexibility in lease-to-own.

“In the next few months, we will be launching our new and improved Merchant Portal. The new design and capabilities reflect feedback we’ve received from our partners about how we can make doing business easier. We’re currently conducting testing and early reviews of the new portal have been overwhelmingly positive.”

A recent Snap survey showed that credit-challenged consumers are cutting back, while customers with good credit are “pushing along,” Slobodian noted.

“They’re relying on financing more, and based on our internal data, we see that customers who might have made prime or near-prime approval are getting turned down more—so they end up applying for Snap.”

POS touch points

Mark Denman, executive vice president of ChargeAfter, said retail merchants are gaining sophistication, in their knowledge and use of the products and services that credit providers offer. These include apps that facilitate credit purchases and leases, as well as those that provide information to the retailer.

“In 2023 we launched ChargeAfter Operate,” Denman said. “That’s a dashboard for retailers that enables post-sale activity and provides data and insights that merchants need to build personalized relationships with their customers.

“There are more innovations in the pipeline, and we are expanding the number of POS touch points we support,” he continued. “Allowing customers to apply in-store, go home and measure their space, and check out at home is a tremendous value-add we’ve recently addressed.

“Another is to enable contractors or associates that work with retailers to offer financing in customer homes. This feature is key for design studios or customers who want a personalized touch from the associate. We are continuing to expand our network of lenders, with a focus on business-to-business financing, furniture financing and home improvement.” Denam noted that retailers that use ChargeAfter to manage their POS financing usually add promo widgets on their websites, to help drive customers to apply for financing and be instantly approved.

“Likewise, retailers promote financing throughout brick-and-mortar stores using a number of methods, from QR codes or messaging about POS financing scattered throughout the store,” he said.

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