According to a new national survey, three quarters of consumers indicate they would be likely to select an online retailer that offered instant financing compared to another that did not; 28% would be very likely to change merchants in order to use instant financing.
Instant financing is an easy-to-use, revolving line of credit that consumers apply for within a merchant’s online checkout. It allows consumers to spread purchases over time with low APR financing offers, and provides an alternative to credit and debit cards when paying for an online purchase.
The online study was fielded between April 10 and 13, 2017 by Researchscape International on behalf of Klarna.
Consumers were quota-sampled using 32 different cells (gender by age by region) to closely match the overall national population.
In terms of how instant financing might impact their spending while shopping online, 39% of consumers indicated they would spend more money on a purchase if they had the option of instant financing compared to 42% who would not and 19% who did not know if they would spend more money.
Smartphone owners, 88% of consumers who responded, were asked about the ease and willingness to enter certain types of personal information when applying for instant financing. Among the information seen to be “too much trouble” to enter were Social Security number and bank account numbers (51% each), and credit card numbers (40%). On the other hand, just over a tenth of consumers found it to be too much trouble to enter an email address (11%), birthday (12%) or spouse’s name (12%).
Other key findings of the survey include:
• Nearly half of respondents (47%) would like to be presented with an instant financing option while shopping online
• Just over a quarter of consumers surveyed (28%) have used instant financing while 68% have not and 4% were not sure if they had
Beyond probing consumers’ thoughts regarding availability, the survey also asked about the convenience and ease-of-use factors of instant financing. For instance, a majority of consumers (52%) expect to wait three or more minutes to be approved for instant financing. Twenty-eight percent would expect to wait two minutes and just 20% would expect to wait under a minute.
Klarna works together with 70,000 merchants to offer payment solutions to more than 60 million users in Europe and North America.