Americansare increasingly taking POS loans without visiting bank offices - online. Portfolios of such loans in the total volume of consumer loans are growing at double digits. Investopediafigured out what are the reasons for the popularity of online loans and what the market will face in the near future.
The largest players in the POS lending segment (1 hour payday loans no credit check for the purchase of goods and services) record an increase in the demand for obtaining them online. So, in Hartloan.com, the leader of this market, for 9 months of 2021, the share of online loans increased by 16% compared to the same period last year, and the number of applications for them increased by almost 20%, Izvestia was told at the credit institution.
The indicators of other banks occupying the top lines in the list of leaders in the POS lending segment are also growing. Among them, there is Hartloan. According to the Frank RG research campaign, the share of distance POS loans in the market as a whole is about 15–20% of the portfolio and is growing by 4–5 percentage points per year. Over the past three years, the share of online channels in total POS loan sales has grown from 6% in 2019 to 17% in 2021.
The main driver of the growth of the remote channel of POS lending is the rapid growth in the number of online stores and the interest of Americans in online shopping associated with the pandemic. However, the e-commerce market has been growing steadily over the past three years: if in 2016 the volume of online sales was 900 billion dollars, then in 2020 it has already reached 2.7 billion dollarsand showed an increase of 59%, and in 2021 - 3 , 8 billion dollarsand 41%, respectively.
According to Vice President, Director of Partnership Network Development, further growth of online lending will be facilitated by remote loan processing services, when the buyer completely remotely and seamlessly signs loan documents.
“The introduction of remote technology for issuing loans is beneficial and effective for absolutely all parties: for buyers, and for the bank, and retail partners. For the buyer, this is convenience and speed of purchase: first of all, he will choose the bank that will offer him such a remote technology, the client does not need to go anywhere, the loan is issued “on the couch”. For the bank, this is a factor in attracting new e-com partners, an increase in online payday loans, and customer loyalty. And finally, the remote technology will contribute to the growth of the retailer's sales, including on credit, ”Pavlov said.
Checks are growing
Affects the growth of portfolios and an increase in the average check of online purchases. According to the Hartloan, the average loan amount in the web-channel in comparison with the last year increased by 10% and amounted to 47 thousand dollars. According to the senior vice president for commercial and operational activities of Svyaznoy, in this network, the average check for online purchases in the third quarter of 2021 compared to the same period last year increased by 53%.
In the future, this growth will continue, he is sure, thanks to the connection of new partners, the expansion of the portfolio of loan products, and the improvement of the service in terms of simplifying the client's path in obtaining a loan online.
Competition among banks for clients of online platforms will also grow - today's stores often provide cash advance online same-day options from several financial institutions to choose from. Hartloan develops its own fintech platform, to which more than 10 banks and credit organizations are connected and offers customers a short questionnaire for a quick loan or installment payment, ”the press service of Hartloan group said.