Potential Dangers of 0% Interest Rates on Installment Loans

Point of sale loans even at 0% are not new; the idea is that a retailer can bring in more sales through this type of partnership; however there are risks to consumers and lenders especially with the current economic outlook; American Banker shares more about Afterpay which is an Australian firm that expanded to the US in the last 18 months; they also dig into the regulatory gray areas that these companies play in; Afterpay currently partners with retailers such as Anthropologie, Levi’s, Skechers and Urban Outfitters; these merchants pay around 4% of the revenue they generate from sales to Afterpay; offering Afterpay increases conversion rates by around 22% and also increases average order size; Afterpay reports 3.6 million active US customers in the last six months of 2019, up from 700,000 in the prior six months. American Banker

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