Retracare GM urges retailers not to be put off offering finance by FCA licensing

In Industry News On

New FCA credit licensing regulations have seen some retailers dropping finance or putting off implementing it as a potential payment option for their customers, according to retracare general manager Matt Sheldrake.

Yet finance schemes are a proven incentive for customers to buy or even trade themselves up in store, and the new FCA licensing requirements are simpler and less expensive than many retailers may realise.

Matt Sheldrake“Most independent electrical retailers will only require limited credit permission and will likely be within the turnover criteria that carries the minimum £100 licensing fee,” Matt (pictured) explains. “The figure is based on your Credit Income rather than your Credit Turnover, which is the profit being made by the credit agreement itself (by you or your credit supplier) rather than the total value of sales on credit. While that sounds a rather complex calculation, if retailers are using retra’s BNPL schemes then the Credit Income to report is simply 5.5% of your Credit Turnover.”

Retra’s finance partner, Hitachi Capital Consumer Finance, last year surveyed 3,000 retail customers and found that over 80% said their decision to buy from a particular retailer was influenced by the retailer’s finance offer. Nearly 50% then stated that they would spend more as a result of attractive packages such as Buy Now Pay Later. The research showed that retailers that don’t offer finance risk losing nearly 44% of customers, with 26% deciding not to go ahead with the purchase or choosing to buy from another retailer instead, Matt says.

“Buy Now Pay Later schemes like these generally cost the business around the same as a typical credit card transaction fee and can really boost cash flow,” he says. “We strongly urge retailers to integrate finance as part of their business and not to be dissuaded by the new FCA licensing requirements.

“Retra members have full access to our business help-desk for help and advice applying for their FCA credit license or we can arrange a store visit by one of our experienced business consultants.”

You may also read!

Usdaw says workers need extra protection from the hot weather

As the mercury rises and the Met Office issues a new amber weather warning for extreme heat, retail trade

Read More...

Hotpoint launches new built-in fridge-freezers

Hotpoint has launched a range of built-in fridge freezers, designed to bring advanced cooling and food preservation technology into

Read More...

Haier to presents its Smart Home concept at Milan Design Week

Haier has chosen Milan Design Week 2021 to bring its idea of the ultimate Smart Home into reality. The Chinese

Read More...

Mobile Sliding Menu

©2021 Innovative Electrical Retailing. Datateam Business Media Limited. All rights reserved.
Registered in England No: 1771113. VAT No: 834 8567 90.
Registered Office: 15a London Road, Maidstone, Kent ME16 8LY
open