U.S. Bank launched Avvance, a point-of-sale lending tool for merchants.
Avvance allows merchants to offer installment loans on purchases ranging from $300 to $25,000.
U.S. Bank also offers a consumer-facing BNPL tool, ExtendPay, which it launched in 2021.
U.S. Bank launched an embedded point-of-sale lending solution this week. The new buy now, pay later (BNPL) tool, Avvance, helps businesses give shoppers options to finance their purchase during checkout after filling out a quick application.
Avvance is embedded into the checkout process and shows the buyer multiple personalized loan options, offering them the ability to pay over time. U.S. Bank backs the loans and doesn’t require the merchant to manage the payments after the sale is complete.
“Our point-of-sale lending product allows business owners the ability to offer affordable financing while they receive full payment at the time of sale,” said Executive Vice President of Buy Now, Pay Later and Point-of-Sale Lending at U.S. Bank and Elavon Mia Huntington. “U.S. Bank, the primary source of the consumer loans, manages all aspects from application to servicing, so business owners can focus on what they do best — running their business.”
Customers can use Avvance installment loans to finance purchases between $300 to $25,000. The financing terms range from 0% to 24.99% APR with repayment plans that range from three to 60 months. When a customer uses the tool to finance a purchase, U.S. Bank offers the merchant the full payment within 48 hours. While Avvance is free for merchants to offer, U.S. Bank charges a merchant discount rate fee for each Avvance loan that it processes.
Avvance’s benefits are similar to those of other BNPL tools on the market. It can encourage the customer to make a purchase they otherwise would not, increase their purchase amount, and help reduce cart abandonment. “With Avvance, business owners have the ability to attract new customers while increasing their buying power, resulting in increased sales,” Huntington explained.
Interestingly, U.S. Bank is marketing Avvance as a point-of-sale financing tool, rather than a BNPL tool. This may be because it wants to target an older generation than BNPL typically reaches. Avvance also differentiates itself from typical BNPL tools when it comes to the base purchase amount required. While customers must spend at least $300 with Avvance, many BNPL tools have no minimum purchase requirement.
Avvance isn’t U.S. Bank’s first BNPL tool. The bank launched ExtendPay in 2021– the height of fintech’s BNPL craze– to offer its credit card holders a way to split purchases over $100 into a series of fixed payments ranging from three to 24 months. U.S. Bank doesn’t charge interest on ExtendPay purchases, but it does charge a fixed monthly fee.
Photo by Mikael Blomkvist
