Having clear and easy to access financing options available at the point of purchase dramatically increases the likelihood that a consumer will make a retail purchase, according to research released today by Citizens Bank.
The inaugural Citizens Point of Sale Survey found that 76% of U.S. consumers are more likely to make a retail purchase if a payment plan backed by a simple and seamless point of sale experience is offered.
According to the survey, 62% of consumers would prefer fixed monthly plans with clear payment terms. Trust in the institution offering the financing, along with a clear understanding of how the amount will be paid off, were seen as the most important factors for consumers considering a large purchase. Further, 66% of consumers feel that they have enough credit cards and prefer not to open more just to make a big purchase. This points to consumers wanting an alternative to opening up a new credit card to make a large ticket purchase at a retailer.
“The bottom line is that consumers want a simple and easy experience when they make a large purchase, and we believe that this research shows that retail brands can modernize their payment model by moving away from the co-brand/store credit approach of the past,” said Andrew Rostami, EVP and Head of Unsecured Lending and Cards at Citizens Bank. “We’ve seen this first-hand as the financing partner for well-known technology brands and believe there is tremendous opportunity in this space.”
The Citizens Bank-sponsored Point of Sale Survey, conducted by Mintel, found that the current state of retail financing dominated by co-branded credit cards leaves room for improvement in the customer experience with fewer than half (43%) of consumers likely to recommend this financing experience for big-ticket purchases. The survey also suggested that payment plan terms should be clear and easy to understand because it is the most important factor for consumers making a large purchase. Trust in a lending institution is the second-most important factor for consumers making large purchases; the survey also found that traditional lenders with name recognition are more trustworthy in the eye of the consumer.
Categories that were most popular for this type of payment plan included electronics, appliances, specialty retail, home improvement, and automotive repair.
Citizens Bank is a leader in point of sale financing and has invested heavily to innovate its payment and purchase model for larger retail purchases. Its solutions are differentiated in that it can power omni-channel retailers, supporting both the online and retail channel in a seamless way and can also help consumer goods manufacturers provide financing programs for their products that are sold through distributed retailers and dealers. The company has an industry leading partnership with one of the world’s most recognizable brands that offers consumers a 0% loan to upgrade to the latest smartphone.
On behalf of Citizens Financial Group, Mintel Comperemedia conducted a nationally representative online survey of 1,837 adults in June 2018. This sample included 520 respondents that used a retail payment plan to finance a large purchase in the past 24 months and 617 respondents that opened a retail credit card to finance a large purchase in the past 24 months.
About Citizens Financial Group, Inc.
Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $158.6 billion in assets as of September 30, 2018. Headquartered in Providence, Rhode Island, Citizens offers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. Citizens helps its customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas and solutions. In Consumer Banking, Citizens provides an integrated experience that includes mobile and online banking, a 24/7 customer contact center and the convenience of approximately 2,900 ATMs and approximately 1,150 branches in 11 states in the New England, Mid-Atlantic and Midwest regions. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, Citizens offers corporate, institutional and not-for-profit clients a full range of wholesale banking products and services, including lending and deposits, capital markets, treasury services, foreign exchange and interest rate products and asset finance. More information is available at www.citizensbank.com or visit us on Twitter, LinkedIn or Facebook.
Rory Sheehan, 781-655-3931