We recently chatted with CommunityLend’s FinanceIt team to figure out what is behind its partnership with Pivotal Payments.
The FinanceIt solution helps merchants provide loans to consumers at the point of sale to finance their purchase. Right now, more than 2,400 merchants across every province in Canada have signed up for the platform, which will be coming to the U.S. in 2014. It is free for merchants to sign up and use.
Quick stats
- Number of employees: 40
- Total funding: $8 million to date
- Total loans to date: Over $400 million in loan applications and over $100 million in originations
- Default rate: under 0.9%
New Partnership
FinanceIt recently partnered with Pivotal Payments, a company that processes over $10 billion in transactions annually. By combining Pivotal’s payment processing and FinanceIt’s in-store financing, this partnership provides an all-in-one point-of-sale solution.
Pivotal Payments plans to resell FinanceIt to its 60,000 merchants and will use the program as an incentive to sign new merchants. Initially, FinanceIt will not be white-labeled for merchants, but it plans to do so later on.
According to Casper Wong, COO of CommunityLend, this is the first of many partnerships, especially as it expands to the U.S.
Vertical Types
FinanceIt works well in the following verticals:
Retail: 5% of loans on the platform
Vehicle: 80% of loans on the platform
Home Renovation: 15% of loans on the platform
Health: 5% of loans on the platform
When the iPad app is released this week, FinanceIt expects the number of loans to shift more toward home renovation and health, which are both more conducive to a mobile point-of-sale solution.
Use for merchants and borrowers
The iPad screenshots below detail the merchant experience of qualifying a borrower for a $2,000 loan issued at the point of sale.
1) The merchant photographs the back of the applicant’s driver’s licence. The app scans the barcode to extract information about the customer and populate loan application fields.
2) FinanceIt verifies the consumer’s credit score via Equifax and ensures they aren’t on anti-terrorist or money laundering lists.
3) Once the borrower is approved, the terms of the loan are displayed for the borrower to confirm or adjust until they are satisfied with the monthly payment.
4) The borrower provides additional
information, such as email and phone number.
5) To finalize the loan, the customer and merchant sign the document on the iPad screen using their finger. Then it is submitted digitally to both the lending institution and the borrower.
The whole process generally takes under 5 minutes.
Use for financial institutions
FinanceIt is working with four financial institutions who fund the loans. The company is seeking more partnerships.
Here’s what the lender sees:
1) The online platform (pictured below) allows lenders to view applications, loans, exceptions, transfers, partners, and reports. The Applications view enables them to filter by:
- Pending loan requests
- Loans ready for funding
- Aborted loans
- Declined loans
- Loans requested on a particular day
2) The platform also provides details about the merchant including historical loan requests and contact information.
Marketing Support
CommunityLend provides a training video and marketing materials that help merchants develop their marketing strategy around FinanceIt’s loan platform. See the example below.
This program, called Merchandising in a Box, helps merchants make decisions on the best combination of financing. For example, is it better to offer no money down combined with a low interest rate, or would they benefit more by offering 6 months no payments combined with a higher interest rate?
The program also provides merchants with marketing materials for their store, such as price tags, customizeable banners for their website, table toppers, window stickers, etc.
If you missed it in New York last year, catch the demo video from FinovateFall 2012. To see the newest development from FinanceIt, come to FinovateFall in New York this September 10 & 11.
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