Consumer purchasing behavior changed in 2020 with the pandemic and retail shops closed in an attempt to stop the spread of the virus. Credit card transactions were up in 2020 compared to 2019 but credit card receivables were down substantially during the same time period. What happened?
People of all ages have aligned themselves with the buy now pay over time business that has finally come to the United States. Many younger consumers like the idea of buying a major item and paying it off rather than putting the purchase on an evergreen credit card that never seems to go away. Now people of all ages are using the service and the proliferation of this business is something bankers need to pay attention to.
In 2010 Square began offering bank’s small businesses a solution to run their payments solution without a banking relationship. Mobile card readers allow small business to receive payments for goods purchased. Why didn’t banks offer this to their customers? Why did a Fintech steal this business from banks?
Just six years ago a company called Quicken Loans started a mobile app for mortgage loans called Rocket Mortgage. They were the first Fintech to underwrite, fund and close mortgage loans in all 50 states. Now they are the largest home lender in the US. Why did a Fintech take this business away from banks?
Now companies like Venmo, PayPal, Sezzle, Affirm, Klarna, SoFi, Open Pay and Quad Pay are once again taking customers away from banks. They offer buy now pay over time for purchases made through merchants. Your bank’s customers are making their monthly payments from their checking account at your bank. Now, many of these companies are offering high interest checking accounts as well. Why did the Fintechs take this business away from banks?
Strunk has a turn-key technology solution that will meet customer demands by providing small dollar lending profitably. For a quick demo of Quilo, contact Strunk at email@example.com or 800.728.3116.