U.S. point-of-sale installment loan industry

Dublin, May 01, 2020 (GLOBE NEWSWIRE) — The “Point-of-Sale Installment Loans: The U.S. Market and International Perspectives, with the Market Impact Assessment of COVID-19” report has been added to from ResearchAndMarkets.com offer.

Consumers in the United States have for decades relied primarily on a combination of credit cards, home equity lines of credit, or personal loans when purchasing large items, with the credit card particularly recognized as the preferred pay-over-time product. Getting rid of familiar payment processes and forms, financial technology (fintech) companies have developed dozens of new point-of-sale (POS) installment financing products. They do not follow a one-size-fits-all approach, but rather gear their solutions towards the various structural pain points in the payments industry. They imagine new processes (not just improving old ones) that create more convenience and value for consumers, and that create enough value for merchants to more than offset the high percentage of sales charged to them by fintechs. .

POS installment financing is gaining momentum in the market as it meets the needs of digital and physical retail stakeholders. It is a showcase for fintechs demonstrating the value created for traders/buyers and the profits generated for their investors through the technology they offer.

Report scope

Consumer credit is a multi-trillion dollar industry in the United States, with POS installment financing (also known as buy now, pay later) subsumed under the financial performance reporting category of “personal loans”. This report separates POS installment loans from their parent category, providing US market size estimates for 2015 relative to 2020, as well as year-by-year projections through 2025. These projections are expressed in terms of impact forecast on economic and credit policy from an economic contraction triggered by a coronavirus pandemic.

While focusing on the point-of-sale installment loan industry in the United States, this report also covers the broader context of point-of-sale financing in Asian, European and Latin American countries. Point-of-Sale Installment Loans: US Market and International Perspectives, with Market Impact Assessment of COVID-19 examines current consumer borrowing behaviors; strategic positioning initiatives of financial technology companies (fintechs), banks, card issuers and card networks; and the cross-border deployment of these initiatives across product categories and trading platforms. It also analyzes each of the industry’s major business models, examining each model’s potential viability as more players join in and bring their own marketing messages, merchant partnerships, revenue models, and targeted consumer cohorts. It provides a comprehensive industry context for POS Installment Loans, an assessment of the strategies and success of existing and new participants in the industry, and a detailed analysis of the opportunities and challenges for those entering or competing in the this fintech sector.

Report methodology

The information in this report was obtained from primary and secondary research. The primary research included a proprietary national survey of online consumers conducted in February-March 2020 to measure POS installment loan usage rates, frequency of use, loan size, vendors and customer demographics. consumers. With a sample size of 2,000 people, this survey relied on national online research panels to aggregate a representative census sample on key demographic measures of age, gender, geographic region, race /ethnicity and household income.

Secondary research includes general business and trade publications, management consulting reports, investment analyst reports, corporate financial documents, and vendor-generated survey results. The research also drew on US and international government and nonprofit and nonprofit business reports, country profiles, and payment systems analysis.

Main topics covered:

1. Summary

  • Scope and methodology
  • Report scope
  • Report methodology
  • Market trends
  • Why is the POS installment loan so popular?
  • 2021 as a year of -10% discount
  • Robust CAGR of 15% nevertheless expected for 2020-2025
  • Table of the U.S. Point-of-Sale Laddered Financing Market: Estimated CAGR 2015-2020 vs. 2020-2025 (Percentage)
  • Table US POS Installment Financing Market, 2020-2025, CAGR (USD Billion & Growth Percentage)
  • Trends and Opportunities
  • Banks
  • Merchants
  • Fintechs
  • A robust and frictionless digital strategy is essential
  • Responsible lending in a coronavirus-affected economy
  • Various strategies based on credit segmentation

2. Market Growth Opportunities

  • Strategic Considerations for Market Participants
  • Banks
  • Merchants
  • Fintechs
  • A robust and frictionless digital strategy is essential
  • Consumers research and buy via mobile, even if they’re buying in-store
  • Table Mobile is becoming the main channel for e-commerce in the United States, 2018-2021 (percentage)
  • Focus on responsible lending
  • Various strategies based on credit segmentation
  • Accelerating the growth of point-of-sale financing
  • The current pandemic will fuel the growth of point-of-sale installment loans

3. US Industry Background

  • The consumer credit market before POS installment financing
  • Finance companies and credit card/store card lines of credit
  • The opportunity that created POS Finance
  • POS installment loans have turned small-dollar consumer finance on its head
  • Consumers receptive to new ways of buying and paying for their purchases
  • The backstory of POS financing
  • The growth of e-commerce has fueled merchants’ appetite for competitive advantages
  • Downstream POS financing in e-commerce to a wider market

4. POS financing in the United States

  • Industry Growth Forecast
  • 2021 as a year of -10% discount
  • Robust CAGR of 15% nevertheless expected for 2020-2025
  • Table of the U.S. Point-of-Sale Laddered Financing Market: Estimated CAGR 2015-2020 vs. 2020-2025 (Percentage)
  • Table US POS Installment Financing Market, 2020-2025, CAGR (USD Billion & Growth Percentage)
  • Summary of rationale for longer-term projections 2020-2025
  • Afterpay Seizing Market in Australia, USA and UK
  • Table Post-Payment Estimates of POS Installment Loan Opportunities in Australia, US & UK, 2019 (USD Billion)
  • Main drivers of growth
  • New market niches, new player strategies contribute to growth
  • Consumers receptive to POS loans
  • Fintechs are leveraging consumer payments to build customer relationships
  • New strategies of traditional financial institutions
  • Main competitive challenges
  • Challenges dictated by the player’s role in the payment transaction
  • New Types of Payment Friction
  • Regulatory oversight: POS lender business models invite scrutiny
  • Competition Price pressures

5. The American consumer of POS financing

  • Survey results
  • Key cohorts include African Americans, parents and students
  • Table Online POS Installment Loans: Customer Demographics (Percentage of Users and Percentage of Total Customers)
  • Frequency of use of online POS loans
  • POS Loan Repayment Periods
  • POS Loans by Amount Borrowed
  • Defining the characteristics of POS loans
  • Interest rates for POS loans
  • Frequency of use of POS loans
  • Number of POS providers used
  • PayPal Credit is the most used POS loan provider
  • Men ask for more credit than women
  • Uses of POS installment payment to move from a large ticket to smaller items
  • Consumers avoid new credit card accounts

6. The American POS Funding Merchant

  • Significant Benefits for Merchants
  • Demanding products for consumers
  • Airlines companies
  • Fintechs

7. American dynamics: traditional players

  • US banks and card issuers join the POS financing market
  • American banks
  • Bank: Citizens Financial
  • Consortium: GreenSky Financial
  • Card issuer: Citibank
  • Card issuer: JPMorgan Chase
  • Financial company: Synchrony Financial
  • Card networks enter the POS financing market
  • Instantaneous
  • Visa
  • American Express
  • MasterCard

8. American dynamics: Fintechs

  • International Fintechs Drive Innovation in U.S. Point-of-Sale Finance
  • Fintechs targeting consumers with/without credit
  • Table Fintech Volumes, Top Products and Refund Methods
  • Klarna
  • PayPal credit
  • myGini
  • Square installments
  • To assert
  • After-payment
  • Table Year-over-year growth of Afterpay business
  • Sezzle

9. International market dynamics

  • Overview
  • Overview
  • European Union
  • Latin America
  • China
  • Western Europe
  • National debt and payment preferences
  • Brazil
  • The largest market in Latin America
  • Mexico
  • The value of e-commerce in Mexico more than doubled between 2014 and 2019
  • China
  • The high level of M-commerce in China
  • Tencent
  • Ali Baba

Companies cited

  • To assert
  • After-payment
  • Ali Baba
  • American Express
  • Citibank
  • Citizen Financial
  • GreenSky Financial
  • JPMorgan Chase
  • MasterCard
  • myGini
  • PayPal
  • Square installments
  • Synchrony Financial
  • Tencent
  • Visa

For more information on this report, visit https://www.researchandmarkets.com/r/87agqw

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Thelma J. Longworth