#284
Point Of Success

Published:

Apr 20, 2019


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Published:

Apr 20, 2019


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Competition in the point-of-sale lending market is heating up! Fintech companies like Affirm (~$3b valuation as of last week), Klarna (~$3.6b valuation), Greensky (~$2.8b market cap), and Bread (~$70m+ raised) have led the way – especially for big-ticket purchases like mattresses, furniture, electronics, or home improvement products.

However incumbent payments and credit companies are quickly entering the space. This week, MasterCard acquired fintech startup Vyze – marking the credit card behemoth’s initial foray into POS lending. Moreover, Chase and American Express are competing for these customers with new, low-cost options that allow people to finance select credit card purchases over a longer period.

The competition may continue to increase given the size of the prize – with an estimated $1.8 trillion POS lending opportunity in the U.S. alone (according to Accenture). Lenders relish distribution at the point-of-sale, where there are no variable customer acquisition costs. Merchants are attracted to financing options that can improve checkout conversion, while offering consumers flexibility on how and when they pay.

Despite the incredible growth of this market, let’s all remember that it is easy to give money out but far more difficult to collect it back profitably. Don’t get over your skis!

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