Credit terms payment alternatives let a consumer defer payment on an online purchase — functioning as an alternative to a traditional credit card, run by a third party rather than the merchant.
Why merchants adopt it
Customers using this option tend to have higher average order amounts. Beyond that, merchants get real-time credit decisions that target creditworthy buyers specifically, get paid immediately regardless of the deferred terms offered to the consumer, get protection against fraudulent chargebacks, see a real lift in conversion, and reach customers who'd rather not hand over card details at all.
How it works
These providers work with surprisingly little data — often just the last four digits of an SSN, a name, and an address — and return a credit decision within seconds.
What to weigh
Impact on average order value and new customer acquisition, how exposed the provider itself is to credit market swings, how well customers already recognize the payment option, and real cost savings against your current setup.