Low awareness of credit options amongst consumers
Consumer spending across a wide range of UK business sectors is being restricted due to low awareness levels around the availability of point-of-sale credit options.
The figures come from a new research report, which found that if consumers didn’t have the immediate funds to purchase something they wanted, just 6% would think to check if a business offered point-of-sale (POS) credit. This is in comparison to 25% saying they would use a credit card in the same situation.
However, more than three quarters (78%) of those surveyed said that they would be willing to purchase through POS finance in the future, suggesting a clear disconnect between readiness to spend in this way and action at the point of purchase.
The research, by finance platform, Duologi, surveyed 1,000 UK residents on their attitudes, awareness and experiences of buying goods and accessing services via credit. It found that, despite many companies – from retailers to healthcare providers and training institutions – taking steps to implement point of sale (POS) finance into their business model, many could be losing out because customers simply aren’t aware of its existence.
A further 14% of people didn’t realise they could apply for POS finance for products or services online – not just in store.
In the retail sector alone, the majority of large brands and approximately 7,000 independent retailers currently offer this type of payment method, with the market worth £5billion in total to the UK economy.
However, if more merchants are able to break the awareness barrier which currently exists around POS finance, they are set to take advantage of a sales opportunity that could drastically boost bottom lines.
Duologi Credit Director, Rob Cottingham, said “Evidently, despite a general willingness to spend on credit, consumer awareness levels are very low with regards to the availability of finance. We know that merchants across all consumer-facing sectors can benefit from offering finance options. However, they must also work hard to promote their finance offering, or this key point of difference will be lost.
“Given that 94% of people wouldn’t even think to think to ask if a merchant offered POS credit, it’s vitally important to promote the finance options available. Simple tools such as pop-up banners near till points, posters in the waiting room or a clearly-visible website header can alert potential customers to the benefits of finance solutions, providing a clear reason to purchase from that business in particular.”
Credit card debt and the cost of borrowing are on the rise
Credit cards are getting more expensive according to new data released by Moneyfacts which revealed that credit card borrowing is rising by around £3 billion year-on-year and £318 million of debt on plastic was written off in the first quarter of 2018.