How To Leverage Point Of Sale Financing

As the payments landscape continues to undergo rapid technological innovation…

According to a projection cited by Accenture, point-of-sale finance holds a more than $1.8 trillion opportunity.

As the payments landscape continues to undergo rapid technological innovation, point-of-sale (POS) financing for consumers will expand its horizons and certainly be an exciting space to watch for merchants. According to a projection cited by Accenture, point-of-sale finance holds a more than $1.8 trillion opportunity. You, as a merchant, can bank on POS financing as it increases your customer’s purchasing power. If your customer has a home renovation on their list of needs, POS financing gives you the power to propose the best option available with you. But, before we dive deep into the best way to leverage POS financing, let’s understand what POS financing is and how did it evolve.

The evolution of point-of-sale financing

Traditionally, two common types of consumer credit are available for making purchases — credit cards issued by the banks, and store-branded credit cards, such as Lowe’s Advantage Card, Target REDcard, etc. Credit card companies are facing market competition from alternative payment methods, which gives merchants a significant opportunity to improve POS financing options that extends beyond the traditional private label credit card. POS financing complements other credit types available, as it gives borrowers an opportunity to purchase when their credit card limit has been reached.

What is POS financing?

Technology-enabled point-of-sale financing has become attractive to the consumer credit system. It allows the buyer to apply for a loan, financing a specific purchase that can be paid off over time. Offering the option of an installment loan at the point-of-sale not only widens the spectrum of customers served but also improves the user experience and makes it easier and quicker — for both the customer and the merchant — to extend and access credit at checkout. The Citizens Financial Group study conducted in 2018, found that 76 percent* of consumers said that they are more likely to purchase if a payment plan is backed by a POS financing option.

Consumer interaction with POS financing

Online, point-of-sale financing can be integrated directly into the merchant’s website checkout experience. Many platforms have been facilitating such integrations for quite some time. What is different with platforms like Skeps is that it also facilitates your customer data privacy along with the smooth integration of the below-discussed experiences into your systems. With a single customer credit report pull, not only your customer’s credit score remains unaffected but, he also gets personalized offers from various lenders. The best part about this integration is, your customer data remains within your firewall and no data is disclosed to partner lenders while evaluation. When your customer applies for a loan on your website, Skeps’ decentralized blockchain-based product collaborates with you to help your customers get the best-personalized offers whilst limiting customer data within your infrastructure.

Let’s see what all experiences can be explored with Skeps —

– Loan options at checkout

Your website can prompt the customer to apply for financing at any point in the shopping journey. From the product/category page to the checkout page you can give various personalized options of financing, spread over pre-agreed installments for a specific time period. Here, approval is instantaneous and the monthly payment amount is clearly laid out so that the buyer can consider interest rates while making the purchase. Recently a study revealed that 62 percent of the customers are more likely to consider multiple financing if they don’t have to fill out another application. Collaborating with Skeps’ blockchain does away with the problem of multiple pulls of your customer’s credit report whilst proposing various personalized options from a whole array of lenders.

– Pre-approved loans

You can improve your customer’s experience with personalized pre-approved loans. It is valuable because it means the lender has checked your customer’s credit to approve a specific loan amount for a particular period. As discussed in ‘4 Reasons Why Consumer Lending Won’t Be The Same’, pre-approved loans using Skeps’ blockchain make your customers aware of their loan eligibility thereby, giving them greater purchasing power to access products or services they need when they don’t have funds available. Your customer can get multiple pre-approved loan options from various lenders and no data will be shared with any of the partner lenders.

– Financing through partner lenders

In some cases, there are chances that you or your financing arm might not be able to give the best loan option to your customer. Partnering with other lenders through Skeps tends to be a profitable solution as it would enhance the customer experience to a whole new level. You can direct your customers to your partner lenders where they can choose the best-personalized loan option for themselves.

A study** recently concluded that retailers offering POS financing options have seen up to a 33 percent lift in average-order-value and a 9 percent increase in sales. POS financing, if leveraged via Skeps’ blockchain tends to offer much-improved shopping experience when compared to the tedious process of applying for a store-branded or a credit card. The quick and transparent product, assures better experience for your customers translating to higher loyalty, better conversions, and more sales for you.

Skeps financing isn’t just a payment option, it’s an effective way to enhance customer experience and coax a customer off the fence to close bigger sales. So what are you waiting for? Schedule a demo to see how Skeps can help you thrive.

*Citizens Financial Group Study 2018
**Bread: What is POS Financing?

Learn About Loan Marketplace And Skeps

Several reasons may compel your customers to borrow money. When looking at…

Blockchain can surely change the game of both traditional and marketplace lending. Read on to know how loan marketplaces can benefit from Skeps.

Several reasons may compel your customers to borrow money. When looking at your options for funding, they may consider traditional lending or alternative lending. Traditional lenders are synonymous with banks or financial institutions. The new forms of lenders such as online lenders, peer-to-peer lenders, and loan marketplaces are categorized as alternative lenders.

Unlike banks, which take in deposits and lend money to businesses and consumers, alternative lenders do not take deposits or lend themselves. They make financial gains from commissions and fees generated by matching borrowers with appropriate lenders. Within these marketplaces, borrowers can interact with investors without the involvement of a traditional lender. The new forms of lenders come with lucrative benefits including less paperwork, more flexibility, and faster funding, due to which traditional lenders have to face progressively significant competition.

The rise of loan marketplaces

Originally brought up as peer-to-peer lending, these offerings were rebranded to loan marketplaces when industrial investors and hedge funds entered this space. A Morgan Stanley research suggests that presently there are over 200 digital lenders in the US, and global volume is predicted to surpass $290 billion by 2020*. Loan marketplaces have recently gained prominence following rapid growth in markets like the US, the UK, and China. They are disrupting consumer lending by meticulously blending advanced technology with data to decrease operating costs, improve borrower experiences, and reach underserved markets. From innovative credit models to anti-fraud tools and user-friendly interfaces, these marketplaces offer a compelling value proposition for both lenders and borrowers.

Current lending process
Current Lending Process
1. After deciding what to buy online, the customer shares his personal details with the merchant.
2. Merchant shares that detail with the lender.
3. The lender gets the credit report pulled by a credit bureau it has partnered with.
4. The lender shares the application status (Accept/Reject) with the merchant.
5. Merchant shares the same with the customer.
6. Post-acceptance process starts between the customer and the lender.

Decentralized lending — the game changer

While loan marketplaces might be creating convenient experiences for your consumers, the risk of their data being exposed to vulnerabilities still prevails. You cannot deny the control and pre-eminence that lies in the hands of only a very few individuals or aggregators. Simply put, with loan marketplaces your customer data is centralized.

Here, blockchain can surely change the game as it demonstrates the potential to disrupt both traditional and marketplace lending. Skeps is one such blockchain-based marketplace for consumer lending, which ensures a seamless, secured and personalized financing experience for customers. Through its easy-to-integrate product, lenders/merchants can offer their customers multiple loan options made available through partner lenders.

Skeps Lending Process
Skeps’ Lending Process
1. After deciding what to buy online, the customer shares his personal details with the merchant.
2. Skeps’ blockchain installed at the merchant’s infrastructure pulls out the credit report.
3. The credit report is evaluated.
4. Basis the credit report, personalized offers from multiple lenders are shared with the customer.
5. Post-acceptance process starts between the chosen lender; i.e. L3 and the customer.

Loan marketplace Vs Skeps blockchain

Skeps blockchain can decentralize the current system and upend the way loan marketplaces function in today’s world in the following ways:

Data Retention

Data Retention

In a loan marketplace, when your customer applies for a loan via aggregators, he receives offers from various lenders, again via aggregators. The aggregator, being the centralized body receives all your customer data. Skeps blockchain does away with this process. The data flows from your customer to Skeps’ decentralized blockchain and offers are presented to your customers. These personalized offers are based on the underwriting model shared by the lenders.

Data Privacy

DATA PRIVACY

A loan marketplace is centralized, which makes it prone to cybercrime. When your customers apply for a loan, the data travels from the aggregator to the lenders, who share offers with the aggregator and then the customer chooses from the offers. With Skeps, data remains within the firewall of the merchants. In case of a loan application, Skeps collaborates with you to help your customers get the best offers. Normally, a drop off is seen when merchants ask for consent to share data. Skeps avoids the need for consent; hence higher conversion.

Limited Credit Pulls

LIMITED CREDIT PULLS

Since aggregators share your customers’ data with multiple lenders, it is obvious that every lender is going to pull their credit report to check their loan eligibility. With multiple pulls of a credit report, your customers’ credit scores can be impacted negatively, and there is a possibility that the next lender might reject their loan application. On the other hand, Skeps requires a single pull of your customers’ credit reports. A single credit pull is enough to check the eligibility of your customers and present offers.

Single adverse action notice

SINGLE ADVERSE ACTION NOTICE

Fair Credit Reporting Act (FCRA) mandates a lender to send an adverse action notification after a customer has been denied a loan application. Since customer data is shared with many lenders in a loan marketplace, every lender upon rejection of the application is supposed to send this notice to the borrower. With Skeps, there is one credit pull and so is the adverse action notice.

Skeps is surely a win for merchants and lenders; for merchants, it is higher customer conversion hence more sales. For lenders, it is higher funding volumes, hence more revenue. Contributing to a healthy lending ecosystem, it also ensures the highest standards of data privacy. Want to know more about us? Read “Hi! We Are Skeps”. If you want to join hands with us, request a demo now!

*Morgan Stanley Research: Global Marketplace Lending Disruptive Innovation in Financials, 2015

4 Reasons Why Consumer Lending Won’t Be The Same

Ever since the world witnessed the rise of cryptocurrencies, the term…

Coined in the wake of the booming cryptocurrency sector, decentralized consumer lending has become effective because it is built on the blockchain technology.

Ever since the world witnessed the rise of cryptocurrencies, the term “decentralize” seems to be all-pervasive. Decentralization is being adopted by many industries to make transactions safer, simpler, and heightened transparency. One industry that has shown great potential regarding the application of decentralization is the consumer lending industry.

Now, many of you might have started to question the existence of banks in the future. You might also think if at all we need a centralized body to approve our loans. As it turns out, maybe we don’t.

The rise of decentralized lending

Coined in the wake of the booming cryptocurrency sector, decentralized consumer lending has become effective because it is built on the blockchain technology. Decentralized lending platforms offer loans in much the same way as regular banks. But, the absence of intermediaries in distributed lending makes all the difference and casts aside the traditional form of lending. Blockchain technology here is a real game-changer as it makes it possible to transfer asset ownership from one person to another in a secure way. The trust here is not established by a financial institution or governments but by smart contracts, collaboration, consensus protocols, and cryptography.

Skeps’ blockchain for lenders

Built on a private blockchain network, Skeps is a decentralized loan marketplace where lenders can collaborate with its partner network to fund more loans. In this blog, we are going to help you with the four distinctive features of Skeps that makes it a compelling product for every lender.

1. Boost loan disbursements

Currently, it takes weeks for lenders to scrutinize, process, and approve a loan, due to which only a handful of applications are approved and loan disbursement is meager. Because the process is long-winded, the lenders need to bear huge operational costs. With Skeps’ blockchain-based product, lenders have access to a large pool of credit-qualified applications, which makes way for higher approval rates, faster processing, and augmented loan disbursements.

2. Enhance customer experience

Findings* show that 47 percent of consumers like an instant financing option, while 40 percent would spend more money on a purchase if they had the option of instant financing. Having pre-approved financing options available enhances the customer experience as it allows them to access the things they need when they don’t have immediately available funds. Skeps’ product helps consumer lenders provide their underwriting model to an extensive network of merchants, thereby offering greater purchasing power to their customers and reducing drop-offs.

3. Data privacy

An American financial services firm is attacked a billion** times per year to make a leakage in the data. In such a concerning scenario, what every lender strives for is, data security. With Skeps, you can be certain of data privacy! When lenders partner with Skeps, their customer data, and the underwriting model remains within their firewalls and they get to choose partners on the network. Since lenders have full control over the platform/dashboard, they can easily customize their underwriting model on a real-time basis and rest assured it is secure and private.

4. Low cost

Since intermediaries are not involved and paperwork is eliminated with Skeps’ product, the acquisition & operating costs go drastically down, augmenting efficiency. On top of this, because lenders get credit-qualified customers, the take rates tend to be higher and they pay only against successful funding. Also, there is a possibility of lenders selling their rejected applications, thereby generating revenue and offsetting the customer acquisition cost.

With blockchain technology transforming the lending industry, Skeps becomes indispensable. Lenders can quickly start disbursing funds and grow their business without having to deal with the hassle of maintaining and investing much in customer experience & acquisition, and data privacy. Read “Hi! We are Skeps”, to know more. In case you want a demo, request today!



*Klarna Knowledge: Instant Financing: Here’s What You Didn’t Know
**Council on Foreign Relations: A Conversation With PayPal’s CEO Dan Schulman

Blockchain Is Transforming The Lending Industry

A recent World Economic Forum Report* states that by 2025, 10% of the GDP will…

A recent World Economic Forum Report* states that by 2025, 10 percent of the GDP will be stored on blockchains. Blockchain technology may not be ubiquitous yet, but it is an indisputable fact that it is a technological breakthrough that has wide-reaching potential to dramatically disrupt a broad spectrum of industries all across the world. While there are many obstacles to overcome, the labor and cost savings it could create for the global financial market are so humongous that all the major financial institutions are investing millions of dollars researching how best to implement it.

Cryptocurrency may be one of the most popular applications of blockchain so far, but the transparent and immutable nature of the technology presents a myriad use cases. Today, the global financial market serves billions of individuals and businesses, moving trillions of dollars around the conventional global financial system. Despite being a part of the digital facade, there are several issues with this antiquated system, which makes it easier for fraud to cripple it. Several use cases of blockchain can deliver worthwhile results. Here are five top ways it can be used in the lending industry:

Fraud Reduction

A PWC report states that 45 percent** of the finance industry suffers from economic crime every year, compared to only 34 percent across all other industries.

At present, the data in the financial organizations are saved in a central database, which makes it vulnerable to cyberattack. Once hackers bypass the security systems, they have full access. On the other hand, a blockchain is essentially a decentralized ledger. Each block has a timestamp and holds blocks of individual transactions with a link to a previous block. This type of system has fewer chances of falling prey to cybercriminals. A complete implementation of blockchain in the lending industry would lead to a transparent system enabling real-time fraud analysis along with the prevention of the same.

Replacing credit bureaus

Because credit bureaus store and control individual data in a centralized manner, it is always vulnerable to theft. Also, these bodies charge heavy fees for pulling out an individual’s credit history. Technically, individuals pay to access their own data. Blockchain technology can address this problem. Storing consumer data across the blockchain network easily eliminates the risks of centralized storage. And, as the data is no longer held in a central repository, ownership is handed back to the individuals whose data is being accessed.

Facilitating KYC (Know Your Customer)

Know Your Customer (KYC) is an inevitable part of the lending industry. As a part of the due diligence protocol, the process of KYC requires the lending institutions to verify and validate the primary documents of the customers. Blockchain can ease this process. The moment a financial institution authenticates a new customer’s identity, it can save his KYC document in a blockchain. This will enable other institutions to use the same KYC without repeating the process. Since the data in a blockchain can never be tempered, the authenticity of the data is an assured thing.

Creating cheaper and secure payments

There is a huge dependency on financial institutions for approving a transaction between a sender and a receiver. They also charge a hefty transaction fee for the same. Apart from this, these institutions take weeks to process and approve a loan. With blockchain technology coming into the picture, no intermediary is required to approve a transaction, and approvals can take place in less than 24 hours, making it a cheaper, faster and safer alternative to bank payments.

Enabling smart contracts

Smart contracts, enabled by distributed ledgers could be programmed by setting a set of criteria to execute financial transactions or create contracts. Heavy reliance on physical documents increases the chances of fraud and inefficiencies. Financial institutions while providing interoperability for the finance system, create overhead costs. Smart contracts will lead to lower service and administration costs, and efficient business processes across the finance segment.

The centralization of the credit industry is fallible. It’s time to start afresh and re-write the rulebook. Skeps’ blockchain-based product offers a compelling solution in this space. By efficiently creating a collaboration between merchants’ customers and lenders, Skeps aims to transform the current lending industry using a decentralized blockchain model. Read “Hi! We are Skeps”, to understand what Skeps does. Interested in collaborating? Request for a demo today.



*World Economic Forum – Deep Shift Technology Tipping Points and Societal Impact
**PWC Report – Threats to The Financial Services Sector

Meet Our Founders – Where It All Began

Working from the plush offices of the top-notch global organizations and…

Working from the plush offices of the top-notch global organizations and making money is a dream and an aspiration for many. Would you even imagine leaving all that behind and start something of your own? Would you even think of taking the retrogressive step?

You got to be a go-getter and have the spunk to deal with all the odds it comes with. That’s how one can describe Skeps’ founders Mayank Tewari and Prerit Srivastava.

The Story Unknown

Friends from their IIT days, both Mayank and Prerit were born in Kanpur, the largest urban agglomeration in the state of Uttar Pradesh in India.

“Success comes naturally to Mayank. We all love struggle stories, but for Mayank, it’s been a story of one success paving way for an even bigger one”, says Prerit with a confident demeanor. The ISB postgraduate Mayank – after working for almost a decade with global companies like P&G, McKinsey, and Uber, it was only in 2015; when he was working on a project for Paytm he realized he wanted to start a business of his own. However, Prerit’s journey narrates a different story. Hit by recession back in 2008, Prerit joined a startup. Motivated by the startup culture at his first job, it wouldn’t be wrong to assert that he developed an urge to become an entrepreneur. In 2012, he went on to establish his startup, which was later acquired by Ola.

When two complementary minds come under one roof

Both the founders have always been crypto enthusiasts. “Never have I ever encountered another person who can explain deep tech to business folks with such ease! Having built our entire blockchain architecture single-handedly, Prerit has been phenomenal”, says an ecstatic Mayank.
While Prerit always has technology on his mind, Mayank is the Jack of all trades.

He can be anyone the company needs him to be and that’s why he has a wild card in his designation as C*O.

Back in 2017, when the duo was toying with several blockchain-based ideas, they got a chance to interact with the right people in the US, who were armed with a deep knowledge of the US financing industry. And, there they found a massive opportunity to disrupt a traditional lending industry with a new age technology like blockchain, which laid the foundation of Skeps . While originally the idea of Skeps started as a consulting project, they quickly realized the idea was much bigger than just a project and could change how financing happens in the US.

Indian Roots, American Soil

Skeps' co-founders - Prerit Srivastava & Mayank Tewari
Skeps’ Co-founders – Prerit Srivastava and Mayank Tewari

Picking the US over India as its first market was a conscious decision for the Gurugram-based startup, which has its headquarters in New York, USA. “The processing of unsecured loans in India is far deeper and requires manual intervention. On the contrary, a better credit history of consumers makes credit decisions instantaneous in the US”, explains Prerit.

So, what is Skeps all about?

To reiterate Mayank’s words, “Skeps is a decentralized marketplace for consumer loans.” It uses a private blockchain technology to enable financial institutions and merchants to collaborate to find the best loan option for their customers. The USP of the product is high-level data privacy. No sensitive information leaves the firewalls of either of the parties. Currently, the team is just focussing on making the platform valuable for the existing customers and make it an even more compelling solution for future ones.

It is still day 1! Long way to traverse ahead

No time is “perfect” to start up. The moment you decide, the choice before you is clear: quit and go for it, or forget it. And, when you start the journey, finding like-minded people to work with comes as a boon. Not only has Skeps found its early investor in Accel, that believes in the product and is equally excited to make it happen, but also been fortunate enough that their idea resonated with ever-curious and passionate folks that are now a part of their core team. As Mayank says, “Next year should be phenomenal for us.” For 2019, Skeps plans to bring in more customers in the US and expand its wings in the international markets where the credit system works similar to the US. “With Skeps in 5 years, the lending process in the US will be efficient where merchants will be able to tailor the right purchase journey for their customers”, believes Prerit.

Hi! We Are Skeps

Skeps comes from ‘skep’, which was used to house bees ever since the 18th…

Skeps is a decentralized marketplace for loan leads, connecting loan seekers (like merchants sourcing loans for their customers), to underwriters.

Where did we get our name from?

Skeps comes from ‘skep’, which was used to house bees ever since the 18th century. You might know that a skep enables bees to collaborate for the broader outcome of more honey. Our platform works in much the same way — hence the name, Skeps.

To put it simply, we are an innovative blockchain platform trying to transform the way loans are sourced globally. While our platform takes care of the internal mechanisms, you can concentrate on the other important aspects of your business. So, let’s understand what we are doing and why.

Current scenario of the loans market

Imagine your customer wants a loan! What will he do? He will go through the options available in the market, submit the application and wait for it to get approved. He might have to browse through a lot of lenders to check the best rates, but imagine how cumbersome and time-taking it would be? On the other hand, if he doesn’t qualify the prerequisites to get a loan, a discomforting experience awaits him. He might have to face rejection from various lenders for multiple reasons. And, it doesn’t end there! The saddest part is that the rejection of loan applications hit hard on your customer’s credit score. With multiple pulls of his credit report, the credit score goes down. The moment his credit score goes down, the next lender tends to reject his loan application and he’d end up becoming a part of this vicious circle.

Low credit score cycle

Now, let’s see through the lenders’ lenses. The lenders are required to thoroughly scrutinize each and every application received, to be able to lend money. In case the application doesn’t match their criteria, they ought to reject the application. Now, this action is unpleasant to not only the merchant’s customers but also the lenders as it adversely affects their approval rates and customer experience. So, what should be done? How do we help these parties

Skeps — The solution for both borrowers & lenders

Think of a platform that facilitates the connection of borrowers to a whole array of pre-approved financing options where they can choose the best fit with a single credit pull. At the same time, envision merchants happily extending loans to each borrower whilst keeping their borrower data safe. Isn’t it a win-win situation for both parties? The borrowers get the money they want and the merchants can have higher application volumes and approval rates.

That’s what we do! Skeps is a decentralized marketplace for loan leads, connecting loan seekers (like merchants sourcing loans for their customers), to underwriters. This means better rates and increased access to credit for merchant’s customers, and fewer declines for lenders. Our product connects merchant’s customers and lenders in a manner, where the data is highly secured and doesn’t leave the infrastructure of any of the parties. Isn’t it interesting? Want to know more about us?

Keep watching this space to learn more about our product! In case you want to give it a try, request a demo today!