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Consumer Financing Guide for Small Business Owners

Source: Finance Derivative

In 2010, a dramatic shift occurred in eCommerce, marking a rapid growth in online shopping. For the first time, online purchases surpassed $1 billion during Cyber Monday.

Once again, purchasing preferences are changing with an increase in buy now, pay later (BNPL) options and consumer financing platforms. Consumer financing gives individuals more freedom and transparency, allowing them to make purchases the same day while paying in monthly installments over time.

The shift in how individuals pay for goods and services is already evident as 36% of consumers use BNPL at least once a month, with roughly 9% using the service more than once a week.

Although larger companies took the initial lead to incorporate consumer financing options, currently, small businesses are following suit and adopting BNPL services. As a result, nearly 30% of small-to-medium businesses are now offering point-of-sale financing, with noticeable improvements in average purchase value and 2% higher conversion rates.

Benefits of Offering Consumer Financing

By the end of 2022, the BNPL industry is expected to exceed $82 billion. This marks an annual increase of 66.5%. And it’s no wonder consumer financing is gaining more popularity since small businesses that incorporate these options enjoy the following benefits:

Customer Acquisition and Retention

Between 2020 and 2021, consumers utilizing BNPL services increased by 85%. With a growing consumer base, small businesses that offer consumer financing can tap into a larger client base. Also, as consumer preferences shift toward more flexibility and control over their payment methods, incorporating a consumer financing option can increase customer acquisition efforts.

Additionally, due to the flexibility and transparency, many more consumers are opting for BNPL services over credit cards, with 62% thinking this could become a permanent shift in how they pay for goods and services. In turn, small businesses that adapt to consumer buying behaviors improve the customer experience.

As a result, individuals who are satisfied with their BNPL services will likely return to a dependable small business that offers quality products and services with quick payment options. For instance, 76% of consumers in the U.S. are more likely to make retail purchases if they are offered a hassle-free BNPL option.

Increased Sales

Paying in smaller monthly installments may be more flexible and budget-friendly for your consumers than a large, upfront sum. And this is evident as conversion rates and incremental sales have increased by 20% to 30% for small businesses that have implemented consumer financing.

Higher Sales Volume and Value

Moreover, BNPL services also incentivize add-on purchases and larger ticket sales. For instance, the average purchase value for consumers using BNPL options is $689.

Moreover, the average order size increased by 15% for small businesses that implemented a consumer financing platform. These increases are largely due to consumers stating that a flexible consumer financing option was the reason they made a purchase.


Although BNPL is slowly being adopted by small-to-medium businesses, integrating a consumer financing platform will give you a significant advantage. Offering consumers flexible payment options can put your small business one step ahead of local retailers or service providers who have not yet explored BNPL services.

How to Offer Consumer Financing as a Small Business

If you’ve made the executive decision to offer consumer financing, there are two main ways you can implement this service: in-house or via a third party.

In-house Consumer Financing

With an in-house consumer financing program, your small business will offer its own financing options like a lender. Typically, in-house financing is more complicated because it requires small businesses to:

  • Conduct credit checks and pay associated costs
  • Collect payments and set up collection schedules
  • Monitor accounts receivable
  • Acquire the software and staff for consumer financing
  • Develop a credit policy
  • Abide by legal and data security regulations

In-house financing puts more power in the hands of small businesses, allowing them to develop and manage all aspects of consumer financing. However, this added control comes with higher implementation costs, legal responsibilities, and effort.

Third-party Consumer Financing

Alternatively, small businesses can opt for consumer financing through third-party providers, which decreases the costs and risks for your company. Third-party providers assume many of the time-consuming, risky, and costly aspects of consumer financing, including credit checks, legal responsibilities, and repayment schedules.

The small business will likely pay a fee for each consumer financing transaction processed by the third party but won’t have to assume any other funding or check verification obligations. Instead, the consumer will pay the third-party provider directly. In turn, the funds will be transferred directly and in full to the retailer or service provider within a few days.

Once you choose a third-party provider, you will need to implement an online form that allows your consumers to apply for financing. The customer’s financial and personal information is then routed to the service provider, who conducts credit and eligibility verifications. If the client is approved for financing, they agree to the repayment terms and interest rates with the provider. In turn, your small business can complete the sale the same day.

Cost of Offering Consumer Financing

The cost of implementing consumer financing will largely depend on the type of program your small business will implement: in-house or third-party. As mentioned previously, in-house consumer financing will be significantly more expensive, as you will need to assume all the responsibilities of BNPL services, including credit check costs, late payments, processing software, and personnel.

Conversely, third-party consumer financing will likely be less expensive since the provider assumes most of the risks and already has the software and personnel in place to fund consumers. Nevertheless, when partnering with third-party providers, your small business will still need to pay a fee per transaction.

Most third-party providers charge between 2% and 6% per transaction, plus a fixed cost of $0.20 to $0.30. Other providers may also charge an additional flat monthly fee to maintain the online software your consumers use to submit a funding request.

Consumer Financing Factors to Consider

Despite the many benefits consumer financing offers small businesses, several factors must be considered before taking the step towards implementation.

  1. If you partner with a third-party provider, your customers may need to meet specific credit score requirements. In some cases, financers only work with applicants with credit scores above 650.
  2. Some third-party providers may also institute minimum spending requirements, only offering financing to consumers who spend over a few hundred or thousand dollars. Additionally, these providers may attach high-interest rates for financing. Although, many third-party financiers are beginning to offer zero interest or low APR to attract more consumers.
  3. When working with third-party provider software, small businesses need to make sure the platform is compatible with existing systems. This will include online eCommerce shops and brick-and-mortar stores.


Undoubtedly, consumer financing and BNPL services are gaining more traction. And it comes as no surprise with the win-win for consumers and small businesses. Particularly, consumers are given more flexibility to pay for larger ticket items in monthly installments, sometimes with zero interest. Similarly, small businesses boost customer acquisition and retention efforts, higher sales and purchase value, and overall competition.

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‘Tis the Season to be Wary: How to Protect Your Business from Holiday Season Hacking

The holiday season will soon be in full swing, but cybercriminals aren’t known for their holiday spirit. While consumers have traditionally been the prime targets for cybercriminals during the holiday season – lost in a frenzy of last-minute online shopping and unrelenting ads – companies are increasingly falling victim to calculated cyber attacks.

Against this backdrop of relaxed vigilance and festive distractions, cybercriminals are set to deploy everything from ransomware to phishing scams, all designed to capitalise on the holiday haze. Businesses that fail to prioritise their cybersecurity could end up embracing not so much “tidings of comfort and joy” as unwanted data breaches and service outages well into 2024.

Threat Landscape

With the usual winter disruptions about to kick into overdrive, opportunistic hackers are aiming to exploit organisational turmoil this holiday season. Industry research consistently indicates a substantial spike in cyber attacks targeting businesses during holidays, particularly when coupled with the following factors:

  • Employee Burnout: Employee burnout is rife around the holidays. Trying to complete major projects or hit targets before the end of the year can require long hours and intense workweeks. Overwrought schedules combined with the seasonal stressors of Christmas shopping, family politics, travel expenses, hosting duties etc., can lead to a less effective and exhausted workforce.
  • Vacation Days: The holiday season is a popular time for employees to use up their vacation days and paid time off. This means offices are often emptier than usual during late December and early January. With fewer people working on-site, critical security tasks are neglected and gaps in security widen.
  • Network Strain: The holidays also mark a period of network strain due to increased traffic and network requests. Staff shortages also reduce organisational response capacity if systems are compromised. The result is company networks that are understaffed and overwhelmed.

Seasonal Cyber Attacks

There are many ways bad actors look to exploit system vulnerabilities and human errors to breach defences this time of year. But rather than relying solely on sophisticated hacking techniques, most holiday-fueled cyber attacks succeed through tried and true threat vectors:

  • Holiday-Themed Phishing and Smishing Campaigns: Emails and texts impersonating parcel carriers with tracking notifications contain fraudulent links, deploying malware or capturing account credentials once clicked by unwitting recipients trying to track deliveries. A momentary slip-up is all it takes to unleash malware payloads granting complete network access.
  • Fake Charity Schemes: Malicious links masquerading as holiday philanthropy efforts compromise business accounts when donated to.
  • Remote Access Exploits: External connectivity to internal networks comes with the territory of the season. However, poorly configured cloud apps and public Wi-Fi access points create openings for criminals to intercept company data from inadequately protected employee devices off-site.
  • Ransomware Presents: Empty offices combined with delayed threat detection gives innovative extortion malware time to wrap itself around entire company systems and customer data before unveiling a not so jolly ransom note on Christmas morning.

Without proper precautions, the impact from misdirected clicks or downloads can quickly spiral across business servers over the holidays, leading to widespread data breaches and stolen customer credentials.

Essential Steps to Safeguard Systems

While eliminating all risks remains unlikely and tight budgets preclude launching entirely new security initiatives this holiday season, businesses can deter threats and address seasonal shortcomings through several key actions:

Prioritise Core Software Updates

Hardening network infrastructure is the first line of defence this holiday season. With many software products reaching end-of-life in December, it is critical to upgrade network architectures and prioritise core software updates to eliminate known vulnerabilities. Segmenting internal networks and proactively patching software can cut off preferred access routes for bad actors, confining potential breaches when hacking attacks surge.

Cultivate a Culture of Cybersecurity Awareness

Cybersecurity awareness training makes employees more resilient to rising social engineering campaigns and phishing links that increase during the holidays. Refreshing employees on spotting suspicious emails can thwart emerging hacking techniques. With more distractions and time out of the office this season, vigilance is more important than ever! Train your staff to “never” directly click a link from an email or text.  Even if they are expecting a delivery they should still go directly to the known trusted source.

Manage Remote Access Proactively

Criminals aggressively pursue any vulnerabilities exposed during the holiday period to intercept financial and customer data while defences lie dormant. Therefore, businesses should properly configure cloud apps and remote networks before the holiday season hits. This will minimise pathways for data compromise when employees eventually disconnect devices from company systems over the holidays.

Mandate Multifactor Authentication (MFA)

Most successful attacks stem from compromised user credentials. By universally mandating MFA across all access points this season, retailers add critical layers of identity verification to secure systems. With MFA fatigue setting in over holidays, have backup verification methods ready to deter credential stuffing.

Prepare to Respond, Not Just Prevent

Despite precautions, holiday disasters can and do occur. Businesses need response plans for periods of disruption and reduced capacity. Have emergency communications prepared for customers and partners in case an attack disrupts operations. The time to prepare is before vacation schedules complicate incident response. It’s important to know how and when to bring in the right expertise if a crisis emerges.

By following best practices to prevent cybersecurity standards slipping before peak winter months, companies can enjoy the holidays without becoming victims of calculated cyber attacks. With swift and decisive action there is still time for businesses to prepare defences against holiday season hacks.

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Transforming unified comms to future-proof your business

By Jonathan Wright, Director of Products and Operations at GCX

Telephony is not usually the first thing SMBs think about when it comes to their digital transformation. However, push and pull factors are bringing it up the priority list and leading them to rethink their approach.

Indeed, it is just one year until PSTN (the copper-based telephone network) will be switched off by BT Openreach. With a recent survey showing that as many as 88% of UK businesses rely on PSTN, many organisations’ hands are being forced to review their communications ahead of the deadline.

But even if this change for some is being forced upon them, the benefits of building a more future-proofed unified communications strategy far outweigh the associated challenges. Nearly three-quarters of employees in UK SMEs now work partly or fully remotely, indeed the highest percentage of any G7 country. Voice over Internet Protocol (VoIP) telephone systems are much better suited to distributed workforces as the phone line is assigned on a user basis, rather than to a fixed location.

And with more companies now integrating AI capabilities to augment their products and services – like Microsoft Teams Pro which leverages OpenAI for improved transcription, automated notes generation and recommended actions – the productivity-boosting benefits for users are only improving.

Making the right choice

For those companies that are seizing the opportunity to change their unified comms in 2024, what should they consider when making their decision?

  1. Choose platforms that will boost user adoption – User adoption will make or break the rollout of a new IT project. So due consideration should be given to what products or services will have the path of least resistance with employees. Choosing a service or graphical user interface (GUI) users are already used to, like Zoom or MS Teams, is likely to result in a higher adoption rate than a net new service.
  1. Embrace innovation with AI capabilities – While some of the services leveraging AI and Large Language Model (LLM) to enhance their capabilities are more expensive than traditional VoIP, the productivity gains could offer an attractive return on investment for many small businesses. Claiming back the time spent typing up meeting notes, or improving the response time to customer calls with automatically-generated actions, will both have tangible benefits to the business. That said, companies should consider what level of service makes sense to their business; they may not need the version with all the bells and whistles to make significant efficiency gains.
  1. Bring multiple services under a single platform – The proliferation of IT tools is becoming an increasing challenge in many businesses; it creates silos that hamper collaboration, leaves employees feeling overwhelmed by the sheer number of communications channels to manage, and leads to mounting costs on the business. Expanding the use of existing platforms, or retiring multiple solutions by bringing their features together in one new platform, benefits the business and user experience alike.
  1. Automate onboarding to reduce the burden on IT – Any changes to unified comms should aim to benefit all of the different stakeholders – and that includes the IT team tasked with implementing and managing it. Choosing platforms which support automated onboarding and activation, for example, will reduce the burden on IT when provisioning new tenants, as well as with the ongoing policy management. What’s more, it reduces the risk of human error when configuring the setup to improve the overall security. Or, in the case of Microsoft Teams, even negates the need for Microsoft PowerShell.
  1. Consider where you work – Employees are not only working between home and the office more. Since the pandemic, more people are embracing the digital nomad lifestyle, while others are embracing the opportunity to work more closely with clients on-site or at their offices. This should be considered in unified comms planning as those companies with employees working outside the UK will need to choose a geo-agnostic service.
  1. Stay secure – Don’t let security and data protection be an afterthought. Opt for platforms leveraging authentication protocols, strong encryption, and security measures to safeguard sensitive information and support compliance.

Making the right switch

As many small businesses start planning for changes in their telephony in 2024 as the PSTN switch-off approaches, it is important that take the time to explore how the particular requirements of their organisations and how the changes to their communications could better support their new working practices and boost productivity.

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Will your network let down your AI strategy? 

Rob Quickenden, CTO at Cisilion

As companies start to evaluate how they can use AI effectively, there is a clear need to ensure your network is up to the challenges of AI first. AI applications are going to require your data to be easily accessible and your network will need to be able to handle the huge compute needs of these new applications. It will also need to be secure enough at all points of access for the different applications to end users’ different devices. If your network isn’t reliable, readily available and secure it is likely going to fail.  

In Cisco’s 2023 Networking Report 41% of networking professional across 2,500 global companies said that providing secure access to applications distributed across multiple cloud platforms is their key challenge, followed by gaining end-to-end visibility into network performance and security (37%). 

So, what can you do to make your network AI ready? 

First, you need to see AI as part of your digital transformation, then you need to look at where you need it and where you don’t. Jumping on the bandwagon and implementing AI for the sake of it isn’t the way forward. You need to have a clear strategy in place about where and how you are going to use AI. Setting up an AI taskforce to look at all aspects of your AI strategy is a good first step. They need to be able to identify how AI can help transform your business processes and free up time to focus on your core business. At the same time, they need to make sure your infrastructure can handle your AI needs.  

Enterprise networks and IT landscapes are growing more intricate every day. The demand for seamless connectivity has skyrocketed as businesses expand their digital footprint and hybrid working continues. The rise of cloud services, the Internet of Things (IoT), and data-intensive applications have placed immense pressure on traditional network infrastructures and AI will only increase this burden. AI requires much higher levels of compute power too. The challenge lies in ensuring consistent performance, security, and reliability across a dispersed network environment. 

Use hybrid and multi-cloud to de-silo operations 

According to Gartner’s predictions, by 2025, 51% of IT spending will shift to the cloud. Underscoring the importance of having a robust and adaptable network infrastructure that can seamlessly integrate with cloud services. This is even more important with AI as it needs to access data from different locations and sources across your business to be successful. For example, AI often requires data from different sources to train models and make predictions. A company that wants to develop an AI system to predict customer churn may need to access data from multiple sources such as customer demographics, purchase history and social media activity.  

IT teams need to make sure that they are using hybrid cloud and multi-cloud to de-silo operations to bring together network and security controls and visibility and allow for easy access to data. Where businesses use multiple cloud providers or have some data on-premise, they need to be reviewing how that data will be used and so how to access it across departments.

Install the best security and network monitoring  

It’s clear that as we develop AI for good, there is also a darker side weaponizing AI to create more sophisticated cyber-attacks. Businesses need end-to-end visibility into their network performance and security and to be able to provide secure access to applications distributed across multiple cloud platforms. This means having effective monitoring tools in place and the right layers of security – not only at the end user level but also across your network at all access points.  

Being able to review and test the performance of your SaaS based applications will also be key to the success of your AI solutions. AI requires apps to work harder and faster so tasting their speed, scalability and stability, and ensuring they are up to the job and can perform well under varying workloads is important.  

Secure Access Service Edge 

The best way to ensure your network security is as good as it can be is to simplify your tools and create consistency by using Secure Access Service Edge (SASE). This is an architecture that delivers converged network and security as service capabilities including SD-WAN and cloud native security functions such as secure web gateways, cloud access security brokers, firewall as-a-service, and zero-trust network access.  SASE delivers wide area network and security controls as a cloud computing service directly to the source of connection rather than at the data centre which will protect your network and users more effectively.  

SD-WAN connectivity 

If you haven’t already, extending your SD-WAN connectivity consistently across multiple clouds to automate cloud-agnostic connectivity and optimise the application experience is a must. It will enable your organisation to securely connect users, applications and data across multiple locations while providing improved performance, reliability and scalability. SD-WAN also simplifies the management of WANs by providing centralised control and visibility over the entire network. 

As we head towards the new era of AI, cloud is the new data centre, Internet is the new network, and cloud offerings will dominate applications. By making sure your network is AI ready, by adopting a cloud-centric operating model, having a view of global Internet health and the performance of top SaaS applications, IT teams will be able to implement their company’s AI strategy successfully. 

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