Best retail finance options for your business

November 14, 2022

Retail finance gives customers more buying power, thanks to the ability to spread the cost of purchases. Not only does it help buyers make purchases, but different finance options also show that your business supports customers by offering them more flexible ways to pay. For that reason, retail finance is essential to successful eCommerce setups. And in this guide, we look at the best retail finance options on the table for your business.

How to decide on the best retail finance for your business

Today's payments landscape continues to evolve. Other, more flexible payment types have joined traditional options like debit and credit cards. These payment types meet the changing demands of consumers and provide them with more options. 

Merchants need to consider their customer's needs before deciding on the best payment options. Yet, one thing is clear: shoppers want variety and are shying away from the more traditional lines of credit. 

Therefore, you should explore newer payment types, such as buy now pay later (BNPL). There’s also the retail finance provider to consider (more on that later),  a decision which should take into account your customer demographic and the range of products or services for sale.

Different types of retail finance

Interest or interest-free?

Before deciding on the different retail finance options for your business, you need to determine whether interest or interest-free is the best way to go – or maybe it's both. With interest-free options, customers spread the cost of their purchase without incurring any additional interest on payments. Finance with interest is the opposite and sees shoppers paying the interest on top of the repayment amount. Whilst interest-free options are a lot more appealing for consumers, typically they come with higher rates for merchants.

Buy now pay later

Buy now pay later is one of the most popular payment methods among shoppers. It's an alternative option to traditional credit and typically requires customers to spread the cost of a purchase over three or four fixed payments. Many BNPL products are interest-free, which is another appealing factor to shoppers. Credit limits on BNPL tend to be lower, with the max amount usually in the region of £2,500. This makes it an attractive finance method for many businesses, including electronic stores, sports and leisure stores, education and training and more.

Digital credit accounts

Digital credit options offer the simplicity of BNPL and the functionality of a credit card account. It's the ideal option for shoppers who are used to more traditional credit but want a more fluid way to make payments. Credit amounts tend to be slightly higher than BNPL, with customers able to borrow up to £5,000 and spread the cost of set repayment dates.

Pay monthly

Pay monthly offers a payment solution for the majority of purchase types and is often available in-store and online - ideal if you have a physical shop as well as an eCommerce website. This option tends to cover bigger-ticket items, for example, Deko’s Pay Monthly product can cover purchases up to £25,000.

What else should you consider before getting retail finance?

Understanding your customer's mindset helps you decide on the best retail finance option. Businesses are all unique, and what works for a furniture store might not be the best fit for a company selling aftermarket products. That's why it's so important to understand your customers. For instance, BNPL products are favoured by millennials and Generation Z. So if they make up a core part of your audience, can you really afford not to offer it as a form of payment? 

Today's customers are also savvier and expect different payment options from online stores as well as brick-and-mortar ones. Retail finance helps you sell more, boost revenue, build customer loyalty, and improve the chance of generating repeat business. 

Sell smarter with Deko

Deciding on a retail finance partner will shape your entire experience when it comes to offering finance. Therefore, you want to partner with a company that understands the market, is forward-thinking and says yes to more customers whilst also prioritising responsible lending

At Deko, we offer a wide variety of payment options tailored to your business needs. Whether you sell online e-learning courses or jewellery, we've got you covered. In fact, we can set most companies up with finance within 24 hours, meaning you're ready to start benefiting from retail finance in no time at all. 

We also operate with a multi-lender product to increase the chance of acceptance rates. Multi-lender works in the background with a panel of lenders, ensuring the applicant is matched with the best fit when they apply at checkout. Nothing changes from the applicant's point of view, and there's no disruption to their shopping experience, and you benefit from higher approval rates. 

FAQs and need-to-know information

What is retail finance?

Retail finance is a type of lending that allows shoppers to spread the cost of payments. Read more about retail finance here

What is a creditworthy customer?

Creditworthy customers typically have a good credit score and have proven they can manage finance payments. We perform the credit check on your behalf, so you don’t need to worry about whether a customer is creditworthy or not. 

How long does retail finance take to set up?

The best retail finance providers will have you set up quickly and painlessly, regardless of your eCommerce platform. For example, Deko’s industry-leading integration experts can get you live in just 24 hours.

Who covers the cost of finance?

Retail finance payments don’t impact your cash flow. This is because the shopper pays back the lender directly whilst you get paid upfront and in full. Your company is also often protected from issues with repayments and fraud, offering you peace of mind.

The best retail finance options

These are the ones that meet your customer’s needs head-on. Working with a retail finance partner that offers a range of payment types means you can delight customers by offering them the payment methods that best accommodate their circumstances, while increasing your chances of winning more business and selling more.