Point-of-sale financing has become an increasingly important payment option for consumers making large purchases, offering greater flexibility than traditional credit cards alone. As merchants look for ways to increase conversions and average order values, partnerships between payment networks and financing providers are expanding the range of available payment choices. Digital lending platforms also simplify the application process, allowing customers to secure financing in seconds while completing their purchases.
The partnership between American Express and GreenSky demonstrates how integrated financing solutions can benefit both merchants and consumers. By combining point-of-sale lending with digital payment technology, the companies aimed to make financing more accessible while helping merchants drive sales in categories such as home improvement and healthcare.
Merchants just received another payments acceptance method. As the following Markets Insider report describes, American Express and GreenSky are partnering to enable merchants to offer alternative financing to their customers.
American Express (NYSE: AXP) and GreenSky, Inc. (NASDAQ: GSKY) today announced a strategic alliance to bring enhanced digital payments and financing capabilities to help merchants grow their businesses and give consumers greater flexibility in financing their purchases.
The multi-faceted collaboration will enable eligible U.S. merchants within the American Express network and the customers they serve to access GreenSky’s proprietary point-of-sale financing solutions. Using GreenSky’s platform and technology, home improvement and elective healthcare merchants that accept American Express will be able to drive incremental sales by providing qualifying customers with options to finance large purchases in a paperless environment.
Customers apply for installment loan financing via GreenSky’s mobile app, online or over the phone, and typically receive a decision and transact within 60 seconds. GreenSky will also have access to American Express vPayment, a virtual payments solution, in order to facilitate purchases via virtual account numbers delivered to approved customers.
In addition, the companies plan to pilot a digital direct loan option with a platform for eligible American Express® consumer Card Members to search for participating merchants within GreenSky’s network, and to finance their purchases at participating American Express accepting merchants of their choosing within or outside of GreenSky’s merchant network. The direct to consumer loans would initially be offered in the home improvement category in five U.S. cities.
Alternative payments to credit cards is not new in the retail world. This arrangement between Amex and GreenSky focuses primarily on mobile apps and online, and interestingly, also includes the plain old landline telephone. Targeting healthcare is a big plus as more medical procedures are self-pay by consumers who need to extend payments. This also opens up another payment choice and more sales opportunities for retailers within the Amex network.
As consumer expectations continue to shift toward flexible payment options, point-of-sale financing is becoming a standard component of the checkout experience. Strategic partnerships between payment providers and lending platforms enable merchants to offer fast, seamless financing while improving customer satisfaction and increasing purchase opportunities. As embedded finance continues to grow, integrated financing solutions are likely to remain an important driver of retail and service-sector payments.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group