A fresh approach to retail finance

Mike Dawson, CEO of the retail finance ecosystem Deko, explains why a more flexible, multi-lender, multi-product approach can improve choice for consumers while also maximising acceptance rate at the checkout for merchants

Hey Mike! Talk to me about Deko.

Deko is a multi-product, multi-lender retail finance ecosystem focused on expanding access to retail finance for lenders, merchants and customers. Knowing that single lenders will have varying levels of sector or risk appetite, Deko partners with multiple lenders to ensure a perfect match for customer, merchant and lender. This means that we can confidently say “yes” to more transactions and help customers access more of the things they love.

What role does retail finance play today?

The terms retail finance and but now, pay later are common in households, with their popularity having exploded over recent years. Surveys show four in 10 Brits say they have used a buy-now-pay-later service when making a payment.

While the benefits to consumers are clear, the benefits to merchants should not be overlooked. When partnering with a retail finance provider, merchants can increase the breadth of their customer pool and enable existing customers to purchase more. So as retail finance services continue to grow – and are expected to double by 2023 - merchants are increasingly identifying them as essential in appealing to as large a pool of customers as possible.

In addition, the lifting of lockdown signals a more positive outlook for the retail sector. It is now a crucial time for all businesses, especially SMEs, to ensure they have the capability to compete in a world increasingly led by e-commerce. At the heart of this issue is the fundamental need to increase the checkout acceptance rate of online sales when customers are making payments.

How does a multi-lender approach differ from traditional offerings?

The main difference is that multi-lender retail finance platforms increase the acceptance rate and basket range that can be covered. With Deko filtering lender options and ensuring the right lender fit for the customer, the multi-lender approach delivers higher confidence the merchant will secure the purchase and that the customer can make the payment. This is what we at Deko identified to be the key driver behind merchants seeing more business. Higher acceptance rates are of use to all merchants but in particular to businesses with a wide product range, especially those with larger than average basket prices. 

With a single lender, if a customer is not approved then they may be left in the lurch, unable to make the payment and the merchant is left without a sale. Through a multi-lender approach, we can responsibly increase approvals, utilising different lender criteria and also deliver larger sized approvals. This enables customers to pay for what they need without friction and across a range of basket sizes.

At Deko, we have seen the demonstrable benefits that flexible payment solutions can provide to our innovative retail partners. Many of these businesses benefited from up to a 30% increase in sales after integrating our multi-lender platform into their checkout process. The integration leaves our partners well-placed to amplify their revenue and drive customer loyalty in order to capitalise on the potential post-pandemic rush.

What do you see as challenges for merchants to the industry in the coming year and what are you doing to meet those challenges?

The past 18 months have been some of the most uncertain and difficult for merchants and customers in the UK. How each of these communities perform in the near future is going to be crucial and this is something that we at Deko understand and are incorporating into our business. We understand that retail finance will be a key facilitator of this recovery, so a greater range of acceptance as well as a seamless checkout experience will be even more important. Most importantly, customers love our service and consistently rate us as excellent. This in turn motivates us to keep pushing further and make the service for our whole ecosystem even better.

Every merchant is unique and requires its own unique service. Retail finance can undoubtedly improve merchant revenue, but it needs to be responsive enough to the different needs of merchants and consumers alike so as to benefit the greatest number. This is where a multi-product service becomes crucial. Traditional buy-now-pay-later services are perfect for some merchants, but a one-size-fits-all approach is not always effective and can be restrictive depending on the type of merchant. 

At Deko, our ecosystem is built on delivering choice. We have a wide range of services both in the sense of new-era digital credit accounts, that require one application and then can be used multiple times, as well as the more well-known buy-now-pay-later payment services and the more traditional bigger ticket loan facilities. This flexibility and bespoke offering is crucial, especially for smaller merchants in more specialised areas that require options for larger payments and basket sizes, and can be used as an effective tool for increasing customer loyalty.

What advice do you have for modern retailers?

Today, merchants can be reliant upon multiple different providers to get the right product or sector coverage, which is not optimal. The key, therefore, is partnering with a multi-lender and multi-product provider who can invest more time in understanding the best match between a merchant and their needs – and deliver this in an effective integrated experience. The relationship between merchants and retail finance partners requires trust and a partner that understands your business. This is what we strive to deliver our partners who work with Deko - a seamless, flexible, retail finance payment ecosystem.

To find out more visit dekopay.com

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