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Why your customers prefer financing over credit cards

Written by:
Mollie Carberry
Published on:
February 18, 2020

Thanks to their convenience and minimal transaction cost for customers, credit cards have remained one of the most popular payment methods in business. 

But popular doesn’t always mean best. And when you start crunching the numbers, it’s obvious how much credit card payment fees are taking from your profit.

By offering other options like financing, you’ll find there are benefits for both you and your customers. In fact, customers often prefer financing over credit cards due to payment term flexibility, softer credit score checks, and comparable interest rates.

Customers get more flexibility

Financing gives your customers control over their payments in a way credit cards never can. It ensures that by the end of term, bills get fully paid rather than rolling over and incurring interest. Up-front costs are clearly defined at the very start of a financing term which provides more transparency and no surprises throughout the repayment process. 

It also offers flexibility to the borrower. Your customers get the chance to tailor and personalize their terms to meet their specific business needs.

"The partners’ clients get to select their terms,” says Ario’s Business Development Team Lead Tyler Roberts. “It’s whatever works best for their business." 

Additionally, offering your customers the ability to finance can have a positive impact on your own cash flow. Customer payments will be received more consistently, promptly and in full with financing - allowing your own business to thrive and grow.

Your customers will get a greater variety of payment options including the ability to split invoice payments between cash/credit card and financing. Splitting payments between multiple methods offers more flexibility - your customers can pay as much as they want with cash and cover the rest with financing with tailored payment terms.

Softer credit score checks

But does applying for financing affect their credit score?

When your customers sign up for financing through Ario’s platform, only a soft check is required for approval and discovery of their credit limit. This means their credit score isn’t impacted at all. 

The same cannot be said when completing a credit card application. A hard check (which does affect their score) is always carried out before one can be approved or rejected for a new card.

Credit card fees are higher than ever

Credit card processing fees have risen steeply in recent years, doubling over the last decade alone. And merchant swipe fees are skyscraper high - Visa and Mastercard fees range between  1.5-2.5% while American Express fees can reach as high as 3.5%. 

Ultimately, these high costs eat directly into your profit, making alternative payment options all the more attractive.


Don’t ditch credit cards. Offer more options.

As a business in 2020, it doesn’t make sense to ditch credit card payments altogether, given existing adoption of this older technology. But it’s worth considering adding additional payment options for your customers to benefit from new technology. 

Offering your valued buyers options and flexibility (like the opportunity to split their payments) is a sure-fire way to build trust and maintain healthy cash flow on both sides of the business relationship. 

Ario offers a range of digital financial services, including financing for small and medium-sized businesses. Ario’s processes are streamlined, easy and intuitive as well as being completely free. 


Sign up for your own white-label payment platform and start offering financing to your customers today.


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