By Mark Yarm. Source: Entrepreneur.
Outdoor furniture isn’t cheap, and that means big furniture stores have a major advantage over little ones: They’re able to provide no-down-payment financing on sets that can run into several thousands of dollars. Laura and John Merlein, co-owners of Laura’s Home & Patio, in East Northport, N.Y., couldn’t afford to offer something like that — and as a result, they appeared to be losing customers to the large stores nearby, especially on big-ticket items. “We had a number of customers asking us if we did any kind of financing,” Laura says.
John set out to solve their financing issue and discovered Blispay. It allows retailers to offer customers no-interest financing on purchases of more than $199, so long as they’re paid in full in six months. (After that, there’s a 19.99 percent APR.) And Blispay handles basically everything: Setup is free, and it provides in-store signage and online banners, charges no fee and even handles the payments. Customers apply for financing (in the form of a Blispay Visa card) via a user-friendly smartphone app.
Laura’s Home & Patio began offering Blispay last May, and the results were immediate. During the shop’s peak season, customers using Blispay accounted for 13 percent of sales and spent an average of $4,517 — a whopping 92 percent more than the store’s median patio furniture sale. Take that, big chains! It helps that the application process is fast; approval takes about five minutes. “It’s great that they don’t have to leave the store,” Laura says. “Because if somebody has to leave, they may not come back.”
A second opinion
Blispay’s top competitors are Synchrony, typically for larger physical retailers and Affirm, which is for online stores but is moving into brick-and-mortar. Brendan Miller, an analyst at the market research firm Forrester, says all retailers could benefit from these services — and not just those with expensive goods. “It could be a fashion retailer selling $200, $300 cocktail dresses,” he says. The best payment processing systems work in-store and (if need be) online, offer quick mobile sign-up and have transparent terms.