Sizzles, Fizzles: POS funding, Etsy, Brexit
Some things are instant hits – smartphones, TVs, and voice-activated personal assistants are all good examples of technologies that have more or less been released and been popular as soon as marketers finished explaining the concept. to consumers.
The other innovations are late blooms. ATM cards, Febreze, and the FICO score were all around for a while, languishing in relative obscurity until something happened to push them into mass consciousness.
Point-of-sale underwriting – installment loans offered to consumers at the time of purchase that allow them to finance their purchase over a period of time, typically three to six months – is more an example of the latter. Although the installment loan is far from new, and point-of-sale (POS) installment loans have been a popular alternative form of payment in other parts of the world, they were relatively rare in the United States. until a little over five years ago. , when digital innovators and startups began to develop the form as an alternative to flashcards or consumers.
And while it might be a bit of an exaggeration to say that Point of Sale Funding had a full ‘A Star Is Born’ experience last week, it wouldn’t be an exaggeration to note that the week’s various sizzles The latter strongly indicate that point-of-sale financing is no longer marginal financing. produced both as a mainstream financial tool that is gaining ground with some very established players.
Chief among them was JPMorgan Chase, arguably the most traditional and established bank in the country. The bank this week announced the launch of “My Chase Plan,” a tool that allows card customers to fund purchases over $ 500.
According to reportsJennifer Piepszak, managing director of card business at JPMorgan, said that with the tool, customers can reimburse purchases already made over a longer period of time and will be subject to monthly fees rather than interest.
“My Chase Plan” is being rolled out alongside “My Chase Loans,” which will allow customers to borrow money on unused credit card balances. Using the Chase mobile app, customers will be able to take their unused lines of credit and transfer them to their checking accounts. Piepszak noted during the Chase investor meeting that the loans will be for larger purchases, such as a kitchen remodel.
“This will allow us to be competitive in the personal loan business, especially without taking on additional risk, as this will be a targeted product feature for our existing customers,” said Piepszak.
One would assume that Affirm – the POS fundraising startup founded by PayPal co-founder Max Levchin – would be upset that the country’s largest bank was throwing its hat to the vertical that Affissent more or less created with its launch in France. 2012.
One, however, would assume wrongly. Levchin views JPMC’s new deployment as a great endorsement.
“This is probably the biggest endorsement we’ll ever get,” Levchin said. Cheddar. “Chase has nothing to do, they’re already the biggest credit card issuer in the world… They’re basically telling the world what Affirm has is pretty valuable and important.”
It was, in a way, the second big support from Affirm of the week, the first coming from Walmart.
The two companies announced that they have signed an agreement that will bring Affirth’s POS fundraising product to Walmart.com and approximately 4,000 Walmart outlets nationwide. The deployment, according to reports, has already started and will continue over the next few weeks.
As is the case with other Affirm partners, potential clients can check their eligibility on the Affirm website without risk to their credit score. Once approved, clients can fund amounts from $ 150 to $ 2,000 over a period of three to 12 months. To complete a purchase, consumers are offered a barcode that is scanned in-store by a Walmart associate. The companies said “select items” such as alcohol, tobacco, groceries and money services, are not available for purchase through the Affirm / Walmart offering.
“Walmart serves millions of people and has become a leader in the retail landscape with its commitment to helping shoppers’ save money and live better ‘, which closely mirrors our own mission of’ improve life ”with our products. I can’t wait to introduce Walmart customers to a modern and innovative way to buy the things they need, ”Levchin said of the match.
Affirm does not charge fees for its product beyond what is stated at the time of initial subscription – customers know what they will be billed in total and each month, Levchin explained to PYMNTS in a post. december conversation.
“We consider it our responsibility to provide products that don’t just say ‘hey, here’s a tool, do whatever you want with it’, but that come with included batteries and an instruction manual that explains the best way to use it, “he said.
And it’s a method, he noted, that is taking off – among consumers of all backgrounds at a wide variety of merchants.
“Many, many, many Americans decide it’s a better alternative for them than [using] a credit card, ”he said.
And maybe many more could if the concept of point-of-sale financing gains momentum at Walmart’s level. Or they can still use those credit cards – but in a very different way than they do now when it comes to big purchases, especially if more issuers look to JPMorgan Chase’s offering. and are following suit (and even if they don’t, given Chase’s size and scale as the largest card issuer in the United States).
It’s not enough to say that the installment loan is a safe bet like the next big thing – all good payers know there is no sure thing.
But that’s certainly enough to hand over the Sizzle of the Week crown.
FAST: Reached a tipping point as more than 50 percent of its cross-border payments were made using gpi, marking a year increase by more than 270 percent. SWIFT also noted that more than $ 40 trillion has been transferred through its gpi service over the past year.
Etsy: The Strongest growth in four years seen on the e-commerce site, and where fourth-quarter sales of about $ 200 million grew 47% year-over-year. In addition, buyers using the platform increased by 18% and active sellers gained 9%. The company said it was gaining shares in its handmade products business.
CBD: Where there is smoke, there is fire, the saying goes – and the United States cannabidiol market can make sparks. Up to 7 percent of Americans report having consumed this substance. Elsewhere, Cowen & Co. has estimated the market could be worth up to $ 16 billion by 2025.
Crypto scams: The same week that JPMorgan CEO Jamie Dimon said he would not rule out the use of crypto in mainstream applications, news came that in India an individual fooled 12 victims out of $ 250,000, with a bogus initial coin offering named after a popular game show in this country.
Identity theft: The three heads of the three credit bureaus – TransUnion, Experian and Equifax – have come to Capitol Hill and have started talking about protecting sensitive consumer data amid massive breaches. Turns out no one is really safe – Equifax CEO Mark Begor said he was the victim of identity theft three times in the past 10 years.
Brexit: Disagree, maybe an agreement, or maybe no exit at all. PM Theresa May accepts a vote that could delay Brexit beyond the March 29 deadline that was set years ago. Amid all the uncertainties, it is estimated that a messy Brexit process could cost businesses as much as $ 17 billion, according to UK government calculations.