Checkout finance is becoming increasingly popular among consumers, according to a new report from Divido. Almost 60 per cent (58.3)Â of consumers see checkout finance as a tool for managing their finances.
According to Divido, the checkout finance platform, checkout finance now rivals cash and credit cards. Consumers aged 18 to 35 are slightly more inclined towards checkout finance than credit cards, with 62.8 per cent using checkout finance compared to 60 per cent using credit cards. The largest age group using the payment method was those aged 31 to 35, with 65.5 per cent stating they use checkout finance.
Its report highlights that checkout finance is no longer limited to Gen Z and Millennials, but has also become popular with a new demographic of non-digital natives. Forty per cent of those aged 60 and over still agree that checkout finance could help them manage their finances. While 37 per cent say they are comfortable paying via this method.
Retailers are increasingly offering checkout finance to support its uptake among consumers. In 2022, 76 per cent of large retailers in the UK had implemented at least one form of checkout finance, with 27 per cent offering multiple solutions.
Divido’s research also found that 50.4 per cent of consumers would be more likely to complete a purchase if they knew checkout finance was a payment option. While 54.2 per cent would consider spending more if this was an option.
Willing to spend
Despite the turbulent year experienced in 2022, consumers are still willing to spend and have become savvier with their finances to achieve this. GfK’s latest index shows that consumer confidence in the UK is growing, despite concern about personal finances. Checkout finance will be key to empowering consumers to spend on big-ticket items such as furniture and electrical goods.
The report also highlights that over the last three years, consumers have used checkout finance to purchase goods across luxury fashion, furniture and homeware, electronics, and white goods. Transactions under ÂŁ250 show that 54 per cent of purchases were in the fashion and beauty sector. For purchases over ÂŁ250, furniture and homeware becomes the dominant category for checkout finance purchases, with 44.4 per cent of customers making a purchase in this space.
Todd Latham, CEO of Divido, explains that checkout finance offers a win-win-win situation for consumers, retailers, and lenders during current economic uncertainty.
“For consumers, their finances are front of mind, but increased payment options at the checkout have given them a way to continue spending in a way they feel comfortable,” said Latham. “For merchants, capturing this new, savvy audience could help them stay afloat during what is set to be a challenging time. Finally, for lenders, offering more vehicles that align with merchant and consumer needs will open them to a whole new audience and revenue stream.”
Divido’s research indicates that there is a large market opportunity for checkout finance across different consumer demographics and merchant verticals. Merchants should pay close attention to consumer preferences for their products and services and consider how checkout finance can diversify their payment product portfolio.
