Ally partners with Mastercard’s Vyze to launch retail point-of-sale lending
- Ally Financial partners with Mastercard’s Vyze to enter the retail point-of-sale lending space, the bank said Tuesday in a Press release.
- Ally will offer installment loans on retail purchases between $ 500 and $ 40,000 with interest rates ranging from 9.99% to 26.99%. Fixed-rate monthly installment loans will range from six to 60 months, the company said.
- Ally abandoned his credit card template last year to expand into point-of-sale loans when it bought Health Credit Services, a company that offered unsecured loans to fund medical procedures. The bank renamed this partnership to Ally Lending.
When acquiring Health Credit Services, Ally CEO Jeffrey Brown said he wanted to apply the company’s point-of-sale lending capabilities to other areas of retail. CFO Jennifer LaClair expressed the company’s enthusiasm for entering the point-of-sale space last year, citing an annual growth rate of 18-20%. Unpaid balances on unsecured personal loans have jumped nearly 60% over the past four years to $ 138 billion, reported credit bureau TransUnion.
Ally, like Vyze, believes that younger consumers, who may find credit cards difficult to obtain or unpredictable, will favor fixed monthly payments on point-of-sale loans. Almost three quarters of retail customers surveyed by Business intern last year the installments helped with budgeting. In addition, 70% said that the installments alleviate the stress of a large purchase. The company also believes that the model results in increased sales for traders.
“Mastercard’s deep experience in global payments and technology positions Vyze as a leader in the point-of-sale lending market,” Hans Zandhuis, director of Ally Lending, said in a Tuesday statement. “Together, our partnership provides merchants who want to provide consumers with reliable and stable installment loan options, a powerful digital option. “