Why Young Consumers Want Point-of-Sale Loans

Sixty-seven percent of Millennials don’t have credit cards

Today’s young consumers have an aversion to credit and debt—and an affinity for straightforward payment plans. They are debt- and budget-conscious in part because they’ve learned from the mistakes of older generations who owed multiple credit card debts when the recession hit. Some even see credit cards as “a necessary evil.” 

However, “consumers recognize the need for credit,” Max Levchin, POS lender Affirm founder and chief executive, said to American Banker, “but are unhappy with the terms and lack of control associated with traditional cards.”

If these young consumers do accept credit or loans for large purchases, they want a clear, sustainable, and time-based plan for getting out of debt. They want options and transparency. This shift has caused many businesses, organizations, and marketplaces to think creatively about how to sell to these budget-savvy, debt-averse shoppers. 

What is the alternative for young consumers looking to buy larger purchases now and the future? 

Point-of-sale loans, or POS financing has been gaining popularilty over the last few years as a viable option. In 2018, point-of-sale loans were the fast-growing subset of personal loans—and for good reason. 

Why young consumers want point-of-sale loans

While young consumers may want to avoid excess credit card debt, they are open to straightforward buy-now-pay-later programs for everyday purchases. In other words, they want transparency, options, and a clear payment plan for paying off their loans. 

In early 2019, MasterCard purchased point-of-sale loan platform Vyze. MasterCard saw the opportunity to continue to encourage young consumers to buy, but with small, short-term loans that could help them avoid compounding interest cycles and credit card debt. 

We wrote a blog post on How point of sale (POS) financing can help your business grow, in which we discuss how businesses can:

  • Reach a whole new demographic of consumers
  • Remove the barrier to purchase entry—and increase sales 
  • Provide more financing options for young consumers
  • Expand into new markets and increase sales
  • Increase transparency and provide sustainable payment solutions

To continue from a business perspective, according to a Forrester report, those companies that offer POS financing as a payment option reported a 32% increase in sales. Upon Airbnb’s 2018 launch of their POS financing option, for example, 40 percent of guests chose the pay-half-now-half-later option and even opted for higher-value bookings on the whole

In other words, POS loans can be both good for business and consumers. 

Why some young consumers opt for point-of-sale loans:

  • More financing options and consumer choice
  • A clear, step-by-step, time-based path out of debt
  • More transparency 
  • Gives consumer more control
  • Eases the stress of paying for large purchases at once
  • Avoids interest and long-term debt
  • Easy to use
  • Superior customer experience in online payment systems
  • Automated, scheduled payment plans
  • Save money from compounding interest
  • Easier on bank account with pay-half-now-half-later options
  • Option to buy higher-value purchases without the risk and debt

Learn more about easy-to-use point-of-sale platforms, such as Progressa Connect™. Our clients leverage our simple API capabilities to approve their non-prime consumer credit and provide the options, transparency, security, and trust that young consumers want today.

Tags : financingfintechpoint-of-salepos
Sam Milbrath

The author Sam Milbrath

Sam Milbrath is a freelance copywriter and brand marketer. When she isn’t writing for brands or doing her own creative writing, she’s exploring, taking photographs, gardening and doing pottery. Check out her work at