What Happens When 1,500+ Startups Enable Frictionless Access to Credit

MEDICIGlobal Head of Content

Removing restrictions does create markets, but more often than not, there is little to no consideration of the potential damage that frictionless access to markets and funds may cause – for consumers, in particular.

While numerous studies have demonstrated that simple access to funds does not necessarily always result in long-term qualitative prosperity for those previously excluded from the formal financial system, the startup ecosystem keeps on pushing the rhetoric of enabling even easier and more frictionless access to funds for a variety of purposes. The matter goes far beyond financial inclusion and into simplifying the business of lending for conspicuous consumption. In fact, the rise of POS financing led to a 32% increase in sales for companies that enabled online POS financing. Moreover, the companies that offer POS financing experience an average increase in “order value” of 75%.

For consumers, the convenience with POS financing comes at its unique cost: the increased average volume for merchants translates into easier spending for consumers. With the opportunity to shop more and exceptional UX, consumers don’t immediately feel the costs – a rather controversial “benefit.” One of the most important points for criticism over easier access...

Elena Mesropyan

MEDICIGlobal Head of Content

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. Elena has been recognized as one of the Top 100 Women in FinTech 2018. Prior, she has been ranked in the Women in FinTech Powerlist 2017.