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By Mike Dawson, CEO, Deko

The retail industry has in recent years changed in a manner more profound than anything seen in the sector since the first department stores and malls emerged a couple of centuries ago. Led by a migration from in-store to online purchases, the changes to the UK retail sector are mostly irreversible. This movement to online has been fuelled by a revolution in retail finance, one which is built on the simple premise: making it simple and easy to split payments.

Yet, amid shifting retail habits, one key challenge remains: cart abandonment. In the UK, 85% of baskets created via mobile in 2021 did not result in a completed order. The limited range of checkout payment solutions on offer is a major factor. As merchants face the challenge of selecting and integrating the right providers for their business, multi-lender, multi-product platforms can provide the key.

The checkout finance revolution

Research shows that close to 10 million Britons have chosen not to buy from merchants which do not offer alternative payment methods at checkout. Just as shoppers expect to have a choice between cash or card payments, checkout finance has become a desirable option to ensure a smooth shopping process for the customer.

Technology lies at the heart of this revolution in checkout finance. Driven by consumer demand for simple, convenient, and seamless purchasing experiences, businesses have increasingly adopted buy now pay later (BNPL) solutions. Now, nearly a fifth of UK adults use BNPL services once a month. It is a rapid change which is set to continue, with ecommerce predicted to reach a market share of 21.8% by 2024. 

Younger generations have driven this trend, and alternative payment solutions have also proved popular with this cohort, with 42% of 18–24-year-olds having used BNPL products. As part of the same survey, only 31% of respondents had used credit cards. These figures highlight the considerable demand for checkout finance, led by the generation driving the ecommerce revolution.

Any basket, any size, any time

While early BNPL offerings in the UK have embraced straightforward single-lender products, the new wave of innovation is offering access to multiple lenders spanning broader basket ranges and wider credit acceptance. Driven by growing demand, it combines short-term BNPL solutions with longer-term instalment financing, operating across a range of lenders with varied risk appetites. 

This provides greater flexibility both to merchants and customers and allows for solutions that are tailored to specific product ranges. Most importantly, it translates to higher conversion rates, fewer cart abandonments, and more sales. A whole-of-market aggregation like this is already available via Deko’s multi-lender, multi-product offering, giving more buying power to consumers.

A future-proof solution

The multi-lender approach used by Deko is captured in a single product allowing more customers to access easily managed instalment plans without fees or high-interest rates. Powerful technology rapidly and automatically matches customers with a marketplace of lenders, increasing the rate of approval among applications for finance at checkout. By automatically guaranteeing the best match between consumers, merchants and lenders, merchants gain an average increase in acceptance of almost 30% compared to single-provider solutions. 

Deko’s product can be plugged seamlessly into any existing infrastructure in as little as 24 hours, with over 22 ecommerce platforms currently supported. The speed at which this integration of flexible payment finance tools can be done ensures minimal disruption to merchants’ business operations and quickly gives customers a far better online or physical store experience.

Of course, there is an understandable reluctance to abandon the high street. But the pandemic has obliged merchants to have an online presence to supplement in-store shopping. The upward trend in online retail is accelerating rapidly. In a virtual environment with thousands of merchants, flexible checkout finance solutions covering any basket size can help businesses stand out. Merchants need to be on board, or risk being overboard – and very likely left behind.

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