Merchant-funded installment financing for direct-to-consumer commerce
Offer shoppers transparent installment loans at checkout while charging the merchant a discount rate for advancing the merchant's cash and increasing conversion. The model evolved from solving the pajama problem—letting someone buy without having their card nearby—into expanding a shopper's budget and helping merchants create demand. Merchant funding can support a genuine 0% consumer loan without deferred interest, lead fees, retroactive interest, or other repayment surprises.
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Problem: Consumers may want a product but lack the available budget, do not have their payment card nearby, or are unwilling to pay the full amount immediately. Merchants otherwise lose the sale or have to absorb customer acquisition and payment costs without creating additional demand.
For: Small and growing direct-to-consumer brands, especially merchants selling high-consideration or expensive products such as cosmetics, beauty products, mattresses, and other goods whose conversion rate improves when the purchase is divided across multiple periods.
Products from this video
Affirm Apple Pay CamelCamelCamel DigiCash Google Pay Instacart PayPal PHP TrialPay
Examples
- Beautylish: presenting installment financing while shoppers selected cosmetics and beauty products produced an immediate 30% increase in conversion.