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Usio Inc. is jumping into the point-of-sale credit arena with its own service, which enables businesses to offer instant credit to customers without the risk of consumer lending.
Announced Tuesday, the service enables merchants to offer POS financing without integration issues or credit concerns, Usio says. “Any business that deals directly with customers over relatively larger-priced purchases can use this instant credit as a way to potentially win more business at the point of sale,” Louis Hoch, Usio president and chief executive, said in a statement. Usio said its service requires no integration and minimizes the risk.
The no-interest buy now, pay later option has a six-week repayment period, while longer repayment periods carry interest. Merchants earn revenue recognition at the time of sale, San Antonio, Texas-based Usio says, and funds are settled the next day, minus fees.
By offering this service, Usio is joining the popular BNPL market. Other payment providers have joined the group, too, especially as BNPL use shows signs of eating into credit card use. A J.D. Power study in August found that credit card holders allotted 42% of their monthly spending to their primary credit cards, down from 47% in 2021 and 2020. What may account for this? BNPL loan use, the study said.
Despite recent spikes in travel and spending, cardholders generally have been taking a more cautious stance with credit card spending in the past five years. They are increasingly turning to other channels, such as debit cards, BNPL, and even cash. Ironically, debit cards are often used to fund the installment payments involved in BNPL programs.
