Ally Financial’s personal lending division has partnered with Vyze, a funding platform owned by Mastercard, to improve its ability to support installment payments.
The transaction marks Ally’s first step into the retail finance market at the point of sale and gives retailers access to “a financially stable lender for higher value put options”.
“In today’s economic environment, flexible and affordable financing options that protect the long-term financial health of consumers and businesses have been more important than ever.” said Hans Zandhuis, head of Ally Lending.
“Mastercard’s extensive experience in global payments and technology makes Vyze a leading provider in the credit market at the point of sale.
“Together, our partnership offers merchants who want to offer consumers trustworthy and stable installment loan options a powerful, digital option.”
Ally Lending through Vyze offers customers a digital process to purchase items up to $ 40,000 with payment options at a fixed monthly price for six to 60 months.
According to a recent report from Business Insider, the market for point-of-sale financing solutions has grown strongly since the 2017-19 global financial crisis. Younger people are particularly interested in alternatives to credit cards, the research showed.
The growth of this market has been particularly driven by financial technology specialists, with traditional banks and loyalty card providers trying to keep up.
According to the FinTech World Report 2019, retailers who offer financing options at the point of sale recorded an average increase in sales of 32% and an increase in order value of 75%.
At the beginning of the year, Ally Financial had to give up a planned entry into the consumer credit card market through the acquisition of Cardworks. The plan was canceled in June because of the “Unprecedented economic and market conditions“ Follow the Covid-19 pandemic.
Payment methods at the point of sale have also changed significantly in 2020, as customers are increasingly reluctant to use cash in view of the Covid 19 pandemic.
In May, PayPal introduced a contactless point-of-sale service based on QR codes. The payment giant’s app now enables customers to buy and sell “personally, securely and contactlessly,” according to a statement.
In June, Canadian DCBank teamed up with Toronto-based fintech company XTM to enable cashless transactions in the country’s sports venues and shopping centers.
The two companies announced that they will be rolling out new kiosks in commercial and retail locations where consumers can exchange up to $ 1,000 ($ 737) in cash for a prepaid Mastercard.
In a statement, DCBank and XTM said the development would help companies reduce their dependency on cash.