Consumers with point-of-sale loans tend to use other forms of credit more responsibly


New TransUnion Study Analyzes Role of Alternative Financing Options in Credit Market and Impact on Consumers

CHICAGO, September 23, 2021 (GLOBE NEWSWIRE) – A new study from TransUnion (NYSE: TRU) found that consumers seeking Buy Now, Pay Later (BNPL) and Point-of-Sale (POS) financing also actively use traditional credit financing – contrary to the assumption that these new credit offerings are taking market share away from credit card issuers and other lenders.

The study, Understand the evolution of the point of sale sector, was presented at TransUnion’s 2021 virtual financial services summit, Smarter Decisions: Emerging for Growth, attended by financial services executives from across the country.

BNPL and POS funding has become a popular offering among younger consumers, with Gen Z and Millennials (ages 18-30) making up the largest breakdown of the consumer population who applied for POS funding over the years. of the study period (32%). Bridge Millennials (31-40) and younger Gen X (41-50) were also more likely to favor BNPL / POS, with 78% of all POS funding applicants being between the ages of 18 and 50.

BNPL and POS offers do not appear to have a major impact on the consumer’s use of other forms of credit. Indeed, BNPL / POS candidates generally use other forms of credit more than the rest of the population.

“Consumers who can use point-of-sale financing are not doing so at the expense of traditional credit. We have seen consumers who have applied for point-of-sale financing accumulate balances on bank and retail cards, and request new credit at higher levels than the general credit population. These new forms of financing increase the credit pie – opening up more opportunities for consumers and lenders, ”said Liz Pagel, senior vice president of consumer loans at TransUnion. “Consumers are looking for new ways to finance their purchases, and the convenience and budgeting of point-of-sale offerings prompts them to finance larger and larger purchases. “

Ease of application and predictable payment plans allow consumers to spread smaller payments over a period of time to afford larger tickets. A TransUnion survey of nearly 1,000 BNPL users found that the majority of consumers cited spreading payments over time (29%) and an easy application process (13%) as the top reasons why they used POS funding. Lack of access to credit, on the other hand, was not cited as a major concern for many consumers.

Consumers applying for POS financing are an attractive segment for acquisition growth

The study looked at the credit profiles of more than 6 million POS financing applicants (defined as consumers with an application on a POS lender’s TransUnion record) to gain a better understanding of consumers interested in this type of product. The study profiled these consumers and examined their portfolios and credit behaviors.

The results showed that POS financing applicants have more credit products, such as credit cards, retail cards, and installment loans in their wallets compared to the general credit workforce. Credit cards were the most popular among POS financing seekers (89%), followed by retail cards (75%) and car loans (73%).

POS funding applicants were also more likely to have a greater number of cards in their wallet compared to the general credit workforce. Card usage levels, however, were very similar across all risk levels, with most consumers having open-to-purchase cards available on their cards. This suggests that consumers are actively seeking point-of-sale financing even when they could have made the purchase on a card.

Consumers who apply for POS financing are also more likely to accumulate or maintain credit card balances in the months following their application than the general credit workforce, which refutes the hypothesis that BNPL / POS decrease card balances.

Bank card

Retail card


Point of sale financing

General credit
active population

Point of sale financing

General credit
active population











Consumers who use BNPL / POS financing, however, still perform well and are on par with the general credit workforce when it comes to delinquency. The study found that while applicants for POS financing score slightly lower on credit cards, they outperform the non-POS segment on unsecured personal loans. The good delinquency rates demonstrated by POS funding applicants make these consumers an attractive segment to target for acquisition growth.

“As more and more consumers participate in point-of-sale financing, these consumers still have healthy delinquency rates on traditional products and are very engaged in the credit market,” Pagel said. “This highlights an opportunity for traditional lenders and point-of-sale lenders to provide more diverse credit solutions to this attractive segment. “

For more information on the TransUnion study, please download the Analysis Guide Understanding the Evolution of the Point of Sale Industry.

About TransUnion (NYSE: TRU)
TransUnion is a global information and analysis company that makes trust in the modern economy possible. To do this, we provide a complete picture of each person so that they can be reliably and securely represented in the market. As a result, businesses and consumers can transact with confidence and achieve great things. We call it Information for Good.®

A leading presence in more than 30 countries on five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.


Dave blumberg



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