Splitit’s Role in the Evolution of Consumer Finance

Consumers and businesses alike have faced many challenges and changes in recent years, but the retail market continues to grow—in 2023, total retail sales amounted an estimated 7.24 trillion USD, which is about a 1.5 billion USD increase from 2022.

These large numbers equate to huge potential for retailers to capitalize on shifting consumer habits and demand. In order to sustain and benefit from this growth, merchants must be ready to understand their audience and react to trends.

Consumer finance is one of the core pillars of retail, and just as trends shift and expectations change, businesses should treat consumer finance as a key consideration when building out their strategies.

Splitit has been a pioneer in rethinking and restructuring consumer finance options to align with modern demand and expectations. Read on to learn about the changing dynamics of retail, the future of consumer finance, and what steps to take to prepare your business for success. 

The Changing Dynamics of Retail

The retail industry is constantly evolving in terms of both consumer demand and the way that retailers meet these expectations. In recent years, we can see this in a few key areas.

Consumer behaviour

As well as seeking out the products and services they want and need, shoppers are looking for brands that offer quality experiences, convenience, and flexibility that suits their lifestyle: 

• 80% of customers claim that the experience a company provides is as important as its products and services.
• 40% of customers purchase more when they are presented with a personalized shopping experience across channels. 

Digital Transformation

Technology shapes and accelerates consumer behaviour, as we can see in the way that ecommerce has become a core focus of retail—in 2023, global retail ecommerce sales accounted for an estimated 5.8 trillion USD, with projections predicting 39% growth to surpass 8 trillion USD by 2027.

With 34% of shoppers reporting that they buy something online at least once a week, digital retail is a key space where merchants must be thinking innovatively servicing customers. 

This mindset should extend beyond desktop devices, with mobile commerce (mcommerce) accounting for 43.4% of overall retail ecommerce sales in 2023. 

Generational Influence

As retailers look to target different audiences, it’s important to cater to the demands of younger generations, who value sustainability, experience, and financial flexibility—58% of retail customers say they’re willing to pay extra for eco-friendly products.

It’s also key to meet younger shoppers where they’re at: 55% of millennials have made a purchase on social media, which is projected to grow to reach 8.5 trillion USD by 2030.

The Future of Consumer Finance in Retail

As the retail world grows and changes, the methods that people use to pay for their products and services are shifting alongside. Merchants should be looking for ways to meet consumer demand while also staying ahead of the curve.  

The Evolution of BNPL & Installments

BNPL services are growing—it’s estimated that by 2027, there will be 900 million BNPL users, which is an increase of 157%. This growth is an indication of both demand and consumer habits gearing towards installment payment solutions. 

Financial Inclusivity

Just as brands learn to become more personalized and consumer-oriented, consumer finance is developing to cater to different lifestyles, budgets, and preferences. Implementing different finance platforms can help brands to connect with their target audience, differentiate from their competition, and provide the service that their customers are looking for. 

Rapid Development

New and innovative consumer finance solutions are quickly being implemented by leading brands and adopted by shoppers:

• Digital wallets and apps: Just as we moved from cash to plastic, consumers are increasingly relying on digital wallets for spending online and instore.
• Borderless spending: As we grow into a global economy, shoppers are looking for financial solutions that enable cross-border transactions.
• Personalized Customer Experiences: As demand and competition in retail marketplaces grow, so do expectations for a seamless experience—payment providers should be looking to create this at every stage of their customer journey, including the checkout.

How Splitit is Revolutionizing Payment Solutions

Splitit’s card-linked installment payment solution is designed to cater to the rapidly changing retail landscape and provide merchants with a modern solution that serves the modern customer. 

Customer Experience: 18% of customers abandon their cart because of a complicated checkout process. Splitit helps to mitigate this, with a white-label platform that integrates seamlessly with your existing branding and customer journey, to help you maintain a frictionless experience in the checkout. 

No Fees or Interest: Splitit works with your customers’ existing credit cards, which means they don’t need to apply for additional financing, undergo a credit check, or fill out long applications. They won’t pay any fees, penalties, or additional interest outside that which is already associated with their credit card. 

Sales and AOV: Offering a flexible installment payment solution helps to drive AOV and improve conversion, as customers have more control over their budget and are able to get access to the products and services they want through a repayment plan that fits their lifestyle. Recent research has shown that consumers spend over twice as much on purchases when using card-linked installments compared to BNPL.

Navigating Regulatory and Economic Changes

When strategizing consumer finance solutions for your business, it’s important to be agile and innovative while also adhering to the strict regulations and protections that are in place for your customers. Key things to consider include:

• CFPB Changes: New governance has been brought in for BNPL providers to ensure they’re offering appropriate levels of consumer protection. The requirements are very similar to credit card protocols and include the right to dispute charges, demand refunds, and receive clear communication about billing, fees, and charges. Splitit’s card-linked platform has always complied with all credit card regulations and therefore these updates do not impact our service offering or consumer trust. 
• Interest Rates: Traditional loans and legacy BNPL platforms may require shoppers to pay interest on their purchases. With Splitit, the installment agreement is based off the space on their existing credit card, which means your customers don’t pay additional interest to use the service.
• Compliance and Adaptability: We adhere to the highest standards of security and compliance and our team is constantly monitoring and adapting to ensure we’re adhering to industry best practice. 

With all this in mind, retailers should be looking for payment providers that prioritize the same things they do, such as flexibility, consumer rights, and long-term adaptability. 

When building out your consumer finance strategy, consider your customers and ensure the platforms you are onboarding make sense for where they’re at now and where they want to be. It’s all about selecting tools that can grow with you and the changing landscape. 

How Splitit is Adapting to Consumer Habits and Market Dynamics

We’ve discussed the rapidly changing worlds of both retail and consumer finance—and Splitit merges them together to help you generate success and growth. 

Seamless Payments: With seamless integration across online and offline channels, you can meet the demands for customer experience by offering a payment solution that integrates with your existing systems and requires minimal effort from customers at every step of the way.

Omnichannel Strategy: Splitit is designed to meet your customers where they’re at, compatible with online, instore, and remote sales channels, so you can offer flexible installment solutions at every key touchpoint. 

Data Utilization: You can use Splitit to tailor payment solutions to your consumer preferences—once you understand who your customers are and how they want to shop, you can target anyone from high-value customers with credit cards to those who are frustrated with legacy BNPL and looking for flexible payment solutions.

Remaining competitive in the changing retail landscape requires both foresight and adaptability. With Splitit, you can future-proof your business with innovative payment solutions that align with consumer demand and wider industry shifts while maintaining the structure and branding that your customers know and trust. 

Splitit offers the best of both words—our platform is designed to adapt with existing consumer finance solutions (such as credit cards, banking, and mobile payments) while also working with modern technology to integrate into a seamless experience. Get in touch with our team to learn how Splitit can help support your business goals.