Lending

The Rise of Point-of-Sale Financing

MEDICIGlobal Head of Content

The rise of point-of-sale (POS) financing comes as an answer to a continuous lack of options to finance shopping and a continuous need to do so.

While more than half of US consumers held six or more payment instruments in 2017, consumers continue to mostly use debit cards, cash, and credit cards for payments. The median number of credit cards for credit cardholders was three.

In 2015, credit and debit cards accounted for 2/3 of non-cash payments processed. At some point, in 2017, 54.5% of credit card adopters carried an unpaid balance (59% in 2015).

Moreover, according to TransUnion, in Q2 2018, the number of consumers with credit cards grew to an all-time high with the continued anticipated increase in serious delinquency (borrower delinquency rates of 90+ days past due (DPD)). The number of consumers with access to a bankcard reached a new milestone of 176 million in Q2 2018, an increase of 2.2% from the previous year.

Overall, the average balance per borrower grew 2.2% year-over-year in Q2, primarily driven by subprime growth. Subprime originations grew 3.9% year-over-year, but lenders reduced credit lines on these accounts by 10%.

Credit card use increased between 2015 and...

Elena Mesropyan

MEDICIGlobal Head of Content

Global Head of Content, MEDICI

Elena is a research professional with a background in social sciences and extensive experience in consumer behavior studies and marketing analytics. She is passionate about technologies enabling financial inclusion for underprivileged and vulnerable groups of the population around the world.