Chapter 1
A power shift at checkout:
The role of finance in the buying journey

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Embedded, personalised, and invisible – flexible finance has hit the mainstream

As consumers seek more flexible and accessible payment methods, the way they access credit is changing and payment flexibility at the point of purchase is a major attraction.

BNPL has emerged as a payment method that allows consumers to purchase goods or services without paying upfront, and then spread the cost over time, often in interest-free instalments. Its counterpart, POS Finance is defined as a consumer financing solution – consumers typically opt for POS lending options when they are purchasing big-ticket items such as furniture, vehicles, home renovation projects, and travel expenses. However, BNPL’s growing popularity means it’s also taking a share of large-value purchases.

“Do people really even see it as credit, or as an easy way to buy?”, asks Tony Moroney, Principal at The Digital Explorer, “What’s important here is where we’re heading with this. It will be totally contextual, immediate, and it will be embedded. When you go to do something, it’ll be when you’re already approved for finance.”

Both options offer consumers the flexibility to pay for purchases in instalments at checkout. These range from short to longer-term repayment plans and can be offered without interest.

As these experiences become more seamlessly embedded, clear regulation and responsible design will play an increasingly important role in ensuring customers understand and use credit confidently.

The availability of embedded lending options at checkout has already been shown to influence purchase decisions, with many consumers more likely to purchase when flexible payment options are offered.

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What our data reveals:

POS Finance, often used for higher-value purchases, is now expected to match BNPL’s speed and simplicity.

Among businesses,

84%

of merchants report growing demand for BNPL

and

87%

say the same for POS Finance.

50%

of adopters are comfortable using BNPL for transactions between £100–£500.

POS Finance is particularly prevalent
in higher-ticket categories:
This payment method is most commonly used with electronics (29%), furniture (26%) and clothing (26%) brands.

Consumer consideration signals growth potential:

15%

have considered BNPL,
compared with

38%

who would consider POS Finance in the future.

32%

of adopters said they spend more when using POS Finance at checkout.

^{While many consumers appreciate the flexibility these payment options offer, merchant adoption remains low: according to our survey,}^{only 39% of merchants currently offer BNPL, while 35% offer POS Finance.}

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The commercial upside of embedded lending is well proven as seen by our data:

BNPL

62% _{^{of merchants offering BNPL report}}_{^{higher average order values}}

57% _^report_{^{improved customer conversion}}

55%_{^{see increased}}_{^{repeat purchase rates}}

POS Finance

54% _{^{see higher}}_{^{repeat business}}

46%_{^{report better}}_{^{checkout conversion}}

46% _{^{note improved}}_{^{customer acquisition}}

_{Top reasons why consumers have never used BNPL or POS Finance:}

BNPL

1. Prefer to pay in full upfront
2. Haven’t needed to use it
3. Unfamiliar with how BNPL works
4. Concerned about debt accumulation

POS Finance

1. Prefer to pay in full upfront
2. Do not want to pay interest
3. Have not needed to use it
4. Not aware of these options

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The lines between BNPL and POS Finance are increasingly blurring, and that’s exactly what today’s consumers expect. Rather than seeing finance as a separate or clunky process, customers now want it to feel as seamless and digital as any other part of the shopping experience. In fact, 43% of merchants say their customers expect POS Finance to mirror the slick, near-instant approval experience they associate with BNPL. That’s driving demand for embedded, digital-first finance journeys that reduce friction and integrate directly into the checkout flow.

But the expectations don’t stop at ease of access.

Personalisation is now a major factor too. 44% of consumers say they would be interested in AI powered smart plans that are tailored to their personal situation - signalling a shift from one-size-fits-all credit toward more intelligent, data-driven decisioning.

There’s also growing appetite to connect flexible finance with broader customer engagement strategies. Almost half of merchants (48%) see the biggest future opportunity in linking finance to rewards to drive deeper loyalty and customer acquisition. This positions flexible finance not just as a means to pay – but as a powerful marketing tool that can boost lifetime value.

Key insight

Consumers are drawn to embedded lending for its budget flexibility, ease, and perceived affordability. Merchants are motivated by customer demand, competitive edge, and higher conversion rates. While their reasons differ, both see BNPL and POS Finance as tools for delivering financial flexibility. In other words, flexible finance is becoming a default expectation at checkout.

Key insight

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Trust as a growth engine:
Why confidence drives checkout conversion

Trust has always been part of the BNPL conversation in the UK, where concerns around regulation, transparency, and affordability have shaped both consumer opinion and media scrutiny. And yet, while consumer adoption of BNPL continues to grow, trust remains a decisive factor in who they choose to borrow from. People want speed and simplicity, but they also want confidence in the provider behind the product. As lending becomes more embedded in the checkout journey through BNPL and longer-term finance options, trust is becoming less of a reputational safeguard and more of a commercial lever.

Our research shows that 34% of consumers say they choose an embedded lending provider based on brand recognition or trust, with a further 30% opting for providers they already have an account with. This preference only deepens as the financial commitment grows: 26% of non-adopters are more likely to use bank-backed BNPL, and that figure rises to 30% for POS Finance. This suggests that while consumers increasingly value embedded lending options at checkout, the provider behind the offer still matters. This is especially true for higher-ticket purchases, where clarity, security, and financial safeguards carry more weight.

“There is probably not enough emphasis on the post-purchase customer journey. Ideally, you want the customer for life. It should all be around building that better relationship with the customer based on real insights and understanding.”

Tony Moroney, Principal at The Digital Explorer,
Co-founder of Access CX

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What’s interesting is that these preferences aren’t just soft signals. They reflect a deeper alignment between what consumers want and what traditional banks already do well: affordability checks, regulated products, responsible lending frameworks, and clear repayment structures. At the same time, consumers expressed concerns about debt accumulation, credit score impact, or unclear terms. Those concerns are not necessarily a rejection of the product, but a signal that how it’s delivered and by whom plays a role in whether it’s trusted or used. This is where banks have a latent advantage. The opportunity isn’t just to offer embedded lending – it’s to showcase the qualities they’ve built their reputations on, in a format that feels as intuitive and accessible as fintech alternatives.

43% of consumers who had not used BNPL said they're neutral about the identity of the provider when considering using BNPL, which should be viewed not as apathy, but as permission. It suggests that with the right user experience (UX), clarity, and embedded journey, banks have every opportunity to re-enter the checkout experience, especially when trust becomes the deciding factor.

For merchants, trust plays out in a different way. While the original assumption might be that consumer scepticism about lending could reflect poorly on the merchant, we found little evidence of that in the data. If anything, trust seems to attach more to the provider than the retailer. A cautious consumer is far more likely to choose a different payment method than abandon the retailer altogether. This means trust in the lending brand may not damage the merchant, but a trusted provider could enhance their conversion rate. In that sense, trusted embedded lending, particularly from regulated financial institutions, becomes a growth tool, not a risk.

This is echoed in our merchant survey, where among merchants not currently offering BNPL, 88% say they’d be more likely to adopt BNPL if delivered by a regulated bank, and 90% say the same for POS Finance. That preference speaks not just to compliance, but to conversion. Because when consumers feel confident in the product and the provider, they’re more likely to commit at checkout, especially for higher-value purchases where trust is amplified.

Would you feel more confident offering BNPL or POS finance if it was delivered by a regulated bank?

Significantly more confident
Somewhat more confident
No difference
Less confident

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Trust in embedded lending isn’t a new conversation, but it is evolving. It’s shifting from a defensive issue to a commercial asset. For banks, that means opportunity to not just participate in the embedded finance movement, but to lead it by bringing their credibility, safeguards and consumer-first principles into a space that is still finding its footing. The challenge is no longer about earning trust from scratch, but about making that trust visible at the moment it matters most.

34% _{^{of consumer respondents said that their choice of embedded lending provider came down to the one they recognised or trusted.}}

30% _{^{would choose a provider they already had an account with.}}

21% _{^{would go with the one offered by the merchant at checkout.}}

26%_{^{of those not using BNPL say they are more likely to use BNPL if it is bank-backed – and this rises to}}

30%_{^{for POS Finance. This preference becomes even more significant for higher-ticket transactions, where brand trust and financial safeguards matter more.}}

_{^{Among merchants, the signal is even stronger:}}

88%_{^{not offering BNPL say they would be more likely to adopt BNPL if delivered by a regulated financial institution, and}}

90%_{^{say the same for POS Finance.}}

Key insight

The message is simple: if you want consumers to borrow responsibly, offer them something they can trust – especially for big-ticket purchases where transparency and affordability are critical. Merchants, in turn, want embedded lending that’s easy to integrate, compliant, secure, and commercially sound. Increasingly, they’re looking to established financial institutions over fintech players to deliver it – but only if they can deliver the speed, UX, and integration that consumers now expect.

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Where the journey begins

For most consumers, the journey with BNPL begins on a merchant’s website. It remains the primary and most influential environment for discovery. According to our survey, 58% of users said their first engagement with a BNPL option happened either while browsing a product or at checkout. This reinforces the importance of onsite integration across all key touchpoints, not just at the final stage of purchase. Clear, well-placed messaging around instalments can play a significant role in shaping how people explore, compare and decide.

But while merchant-owned environments continue to lead, new starting points are gaining ground. Nearly one in four consumers begin their journey within a BNPL provider’s app. Others are introduced through marketing channels such as email campaigns, social advertising or influencer content. Combined, these offsite routes account for more than 40% of first-touch interactions. These are not secondary. They are now a significant part of how people encounter and engage with flexible finance.

This shift is changing what merchants need from their finance partners. The ability to embed clear and consistent messaging across their own channels is still essential. Equally, partners who can extend visibility through additional touchpoints are highly valued. That might mean support with joint campaigns, audience targeting, or placements inside app ecosystems that already carry brand weight with consumers. These efforts help bring traffic back into the merchant environment and create more informed, confident customers when they arrive.

The opportunity is to meet consumers wherever their journey starts. When merchants optimise their own estate and work with partners who can amplify reach across other channels, they improve visibility, consistency, and conversion.