Financing at the Point of Sale: Mobile Payments’ Next Big Move?

If your wallet is still feeling a little flat from the recently-concluded holiday shopping season, rest assured you’re not alone. But, and darn those makers of just about everything good, the spirit of shopping doesn’t fade even when the flesh of the wallet is weak. That’s led to some noteworthy developments in installment plans, and a new report suggests that installment plans at the point of sale (POS) could be a major new development for mobile payments in 2020.

The concept is sound, and actually somewhat familiar. Basically, organizations like Mastercard—who have themselves long been the bastion of pay-it-later shopping—have caught on to the notion that when people start thinking, they start second-guessing. When they start second-guessing, carts get abandoned and sales are lost. So such organizations are stepping up to help remove the misgivings from the process of buying by offering financing right at the point of sale.

Better yet, when the squeeze feels a little less pronounced, shoppers are more likely to do just that—shop—and spend more besides. This led to such moves as Mastercard’s purchase of Vyze, and the recent rise of Splitit as we’ve chronicled it here.

The idea also has several worthwhile use cases. Consider the applications for travel; when that $4,000 getaway comes with four smaller $1,000 price tags over the space of several months, it suddenly looks a lot more viable than it did previously.

It would be easy to brush this concept aside as the latest attempt to bypass personal responsibility and spur the already weak-willed to greater heights of debt and spending, but it’s a notion with some real applications. Certainly, this is a great incentive to making more big-ticket purchases, and while we’d all be better off as a society if we lived within our means and spent responsibly, well, that’s just not much fun, now is it?

At any rate, this is likely to prove a welcome shot in the arm for businesses, who will likely be happy to sell more stuff even if they won’t fully get paid for it for months. A quarter of a sale today beats no sale at all.