back Back

Checkout finance popularised as most trusted payment method

By Puja Sharma

April 17, 2023

  • Checkout Payments Platform
  • Checkout Services
  • Credit Card
Share

checkout finance,

 

New data released by the checkout finance platform, Divido, has found 58.3% of consumers see checkout finance as a tool for helping them manage their finances.

The insights from Divido’s ‘Consumer sentiment report: How are shoppers using checkout finance in 2023’ reveal that checkout finance is fast becoming one of the most trusted and popular forms of payments among consumers, and now rivals cash and credit cards. Those aged 18–35 are slightly more inclined towards checkout finance than credit cards, with 62.8% saying they used checkout finance compared to 60% who use credit cards. The largest age group was those aged 31-35 in which nearly two-thirds (65.5%) stated they use the payment method.

While Gen Z and Millennials are accustomed to checking out finance to continue making purchases, there is a new demographic, who are not digital natives turning to this payment method to purchase across a variety of industries. 40% of those aged 60+ still agreed that checkout finance could help to manage their finances and 37% said they would be comfortable paying via this method.

This appetite is matched by retailers looking to offer checkout finance. In 2022, Divido’s data found that 76% of large retailers in the UK had implemented at least one form of checkout finance (either BNPL or traditional retail finance), with 27% offering multiple solutions. This increased offering of checkout finance is supporting the uptick of its usage amongst consumers.

Checkout finance will be key to empowering consumers

After a turbulent 2022, Britain was plunged into the worst cost-of-living crisis in a generation, and interest rates increased again, hitting 4.25%. Despite this, consumers are still willing to spend and have become savvier with their finances to achieve this. The latest index from GfK found that as the UK avoided an early recession, consumer confidence will continue to grow, despite concern about personal finances. The rise is attributed to the likelihood that people would buy big-ticket items such as furniture and electrical goods.

Checkout finance will be key to empowering consumers to spend on such items. The research found that 50.4% of consumers would be more likely to complete a purchase if they knew checkout finance was a payment option and 54.2% would consider spending more if this was an option.

Furthermore, the research uncovered that in the last three years, consumers have used checkout finance to purchase goods across luxury fashion (38%), furniture and homeware (36%), electronics (30.9%), and white goods (22.6%) which highlights growth opportunities for the payment offering in these sectors.

Todd Latham, CEO of, Divido, said, “Checkout finance offers a win-win-win situation for consumers, retailers, and lenders during current economic uncertainty. For consumers, their finances are front of mind, but increased payment options at the checkout have given them a way to continue spending in a way they feel comfortable. For merchants, capturing this new, savvy audience could help them stay afloat during what is set to be a challenging time. Finally, for lenders, offering more vehicles that align with merchant and consumer needs will open them to a whole new audience and revenue stream.”

Luxury retail poised for checkout finance growth

Looking at transactions under £250, Divido’s research found that 54% of transactions are in the fashion and beauty sector. Fashion and beauty is by far the most popular category for female consumers, with over half (52.8%) of women having used checkout finance to purchase fashion and beauty products. Comparing generations, consumers aged 18–35 were more likely to purchase such items through checkout finance, with 56% having done so. That falls to 30.2% for people aged 35–65, and as low as 8.5% for people aged 65+. While fashion and beauty’s top spot is down to the high volume of low-value BNPL transactions, there is an opportunity for luxury retailers to increase revenue streams with checkout finance and expand their customer base.

For purchases over £250, Divido found that furniture and homeware become the dominant category for checkout finance purchases, with 44.4% of customers have purchased this space. 36.9% have purchased electronics and 30.5% had purchased white goods. Those aged 35–65 were most likely to purchase furniture and homeware (36.2%), while over-65s mostly used checkout finance for electronics (37.7%). As many look to make home improvements, cover moving, or purchase a new home, there is an opportunity to serve a broad consumer base with this payment option.

Latham continues, “The use of checkout finance across different consumer demographics and merchant verticals showcases there is a large market opportunity around helping consumers to spend sustainably and in manageable instalments. Merchants should pay close attention to these consumer preferences for their products and services and look at how checkout finance can diversify their payment product portfolio.

This year will continue to be difficult for many and providing a variety of payment options at checkout is one way to support consumers’ efforts to manage their finances during today’s economic climate.”

Previous Article

April 17, 2023

Intergiro and Incharge unveil banking app for students in Europe

Read More
Next Article

April 17, 2023

Coupa and Goldman Sachs launch B2B payments solution

Read More






IBSi FinTech Journal

  • Most trusted FinTech journal since 1991
  • Digital monthly issue
  • 60+ pages of research, analysis, interviews, opinions, and rankings
  • Global coverage
Subscribe Now

Other Related News

Today

Can tech-driven CFOs lead the next wave of innovation in financial services?

Read More

Today

Worldline & Forthcode bring in-flight payments on Android POS in India

Read More

December 11, 2024

Caxton Payments enhances security with tell.money partnership

Read More

Related Reports

Sales League Table Report 2024
Know More
Global Digital Banking Vendor & Landscape Report Q3 2024
Know More
NextGen WealthTech: The Trends To Shape The Future Q4 2023
Know More
IBSi Spectrum Report: Supply Chain Finance Platforms Q4 2023
Know More
Treasury & Capital Markets Systems Report Q1 2024
Know More