I want to offer finance to customers in the UK

Why finance at checkout is winning right now

UK consumers are using credit to keep essential purchases within reach while maintaining control of monthly budgets. Recent industry data shows the consumer finance market grew by 8% year on year in September 2025, the strongest monthly value since March. Credit cards and personal loans rose 6% over the same period, while retail store and online credit dipped 3%. The takeaway is clear: demand is shifting toward flexible, mainstream products with transparent pricing, delivered through smooth digital journeys.

For retailers, this is an opportunity to convert hesitant browsers into confident buyers. Finance at the point of sale does not just defer cost. It reassures customers that the purchase fits their budget, especially with inflation stabilising and potential Bank Rate cuts on the horizon. Even so, sentiment remains cautious ahead of a tax-raising Budget, which makes clarity, affordability checks, and responsible design non-negotiable.

Alongside traditional instalment credit, short-term solutions like Buy Now, Pay Later are rising, as is premium finance in specific categories. The broader UK financial services sector is forecast to expand rapidly through 2029, driven by technology, personalisation, and embedded finance. AI-driven decisioning and pre-filled applications can compress approval times from minutes to seconds, while analytics improve acceptance without compromising on risk. Consumers also care more about sustainability, with over one in five already holding at least one sustainable finance product. Providers that surface greener options or link lending to positive outcomes can stand out without sacrificing commercial returns.

Kandoo is a UK-based retail finance broker. We connect customers to a panel of lenders, enabling fast, compliant journeys that prioritise affordability and transparency. Whether you sell online, in-store, or via telesales, the right finance mix can lift conversion, grow average order values, and reduce basket abandonment. The right partner should integrate with your tech stack, deliver clear disclosures, and support you on FCA permissions and oversight. It is about building trust at the checkout - and keeping it after the sale.

Understanding APR is not just about percentages - it is about what you will pay in real terms. Customers repay with confidence when costs are clear upfront.

Bottom line: UK shoppers want flexible, fairly priced credit. Retailers that offer it responsibly can grow faster - even in a cautious market.

Who should consider offering finance

If you sell considered purchases - think home improvement, furniture, e-bikes, dental or optical services, consumer tech, or automotive aftermarket - finance can unlock demand and soften sticker shock. It is equally effective for services with one-off spikes in cost, such as veterinary care or education-related products.

Brands with longer research cycles benefit most. If customers compare across tabs and delay purchase, a finance banner or calculator can convert intent into action. Omnichannel sellers can also use finance to unify journeys: apply online, finalise in-store, and manage repayments in-app. Finally, if your audience skews value-conscious, finance offers a budget-friendly path that aligns with rising UK cash ISA uptake and a general preference for predictable payments.

Jargon made clear

• APR: The annual cost of credit including fees, shown as a percentage.

• Representative APR: The APR that at least 51% of accepted customers are expected to receive.

• Total amount payable: Full cost over time - sum of credit plus interest and fees.

• Soft search: Pre-check that will not affect the customer’s credit score.

• Hard search: Full credit check that can leave a footprint on a credit file.

• BNPL: Short-term instalments, often interest free, with clear due dates.

• Embedded finance: Credit offered within your checkout or app journey.

• Affordability assessment: Evaluation of whether repayments are sustainable for the customer.

• FCA permissions: Regulatory approval required for credit broking or lending.

• Treating Customers Fairly: FCA principle to ensure fair outcomes throughout the journey.

Your main routes to market

1. Partner with a retail finance broker

   • Access multiple lenders with one integration. Improve acceptance, cater for prime to near-prime, and reduce operational burden. Useful where product prices vary widely.

2. Direct lender integration

   • Contract with a single lender. Potential for preferential rates and tailored underwriting. Requires more negotiation and contingency plans for declines.

3. BNPL integration at checkout

   • Light-touch onboarding and fast customer journeys. Works well for smaller baskets and repeat purchases. Ensure transparency on late fees and affordability.

4. In-store credit with e-signature

   • Tablets or terminals for assisted applications. Ideal for higher-ticket items needing conversation and advice. Aligns with credit cards and personal loans trending up.

5. Hybrid finance stack

   • Combine cards, instalment loans, and BNPL. Route customers to the best fit based on basket size and credit profile, improving approvals and satisfaction.

Tip: Where retail store credit is softening, diversify toward personal loans and card-linked instalments to match current UK demand patterns.

What it costs and what it delivers

Who qualifies and on what terms

Eligibility varies by lender and product, but patterns are consistent. UK residency, age 18 or over, and a verified identity are baseline. Affordability is central, especially where terms extend beyond a few months. Expect soft searches upfront and hard searches on application, with additional checks for higher ticket sizes. Lenders will look at income stability, credit file health, and recent repayment history. For merchants, underwriters consider your sector risk, average order value, refund policy, chargeback rates, and financial resilience. If you operate in higher-risk categories, a broker-led panel can improve outcomes by routing customers to the most suitable lender. Sustainable finance options may require additional disclosures or product criteria, particularly where environmental claims are made. Across the board, you must present clear pre-contract information, representative APR where relevant, and unambiguous total cost illustrations. Training staff to handle affordability conversations sensitively is essential in a cautious sentiment environment.

From sign-up to live in days

1. Scope products, price points, and target customer outcomes

2. Choose broker or lender and confirm FCA permissions

3. Configure pricing, promotions, and affordability criteria

4. Integrate checkout, e-signatures, and credit decision APIs

5. Test journeys, disclosures, and decline fallbacks end-to-end

6. Train staff on conversations, complaints, and vulnerable customers

7. Launch with clear banners, calculators, and performance reporting

Balancing upsides with trade-offs

Read this before you press go

Responsible design starts with the customer’s budget, not your sales target. Promote clear costs, show total payable, and provide realistic monthly examples. Ensure soft-search journeys upfront and offer alternatives when the answer is no. Build a decline pathway that preserves the sale with different tender types. In a market where savings balances are rising and shoppers remain cautious, reassurance beats pressure. Use real-time calculators, avoid drip pricing, and signpost support for customers in difficulty. Finally, monitor complaint themes and outcomes data. It proves your approach works and helps you adapt as regulation and sentiment shift.

If finance is not the only answer

1. Deferred card instalments via card schemes - simple set-up and wide coverage.

2. Savings-linked offers - pair promotions with cash ISA seasonality to convert planners.

3. Subscriptions or service plans - spread ownership and maintenance into predictable fees.

4. Layaway or reservation deposits - hold stock while the customer saves.

Common questions, expert answers

Q: Do I need FCA permissions to offer finance? A: If you are broking regulated credit, you usually need FCA authorisation or to be an appointed representative. A broker can help structure this correctly.

Q: Which products UK customers currently prefer? A: Credit cards and personal loans are driving growth, with new business up around 6% year on year. BNPL and premium finance are also rising for short-term needs.

Q: Why is store credit falling? A: Store and online retail credit dipped about 3% year on year, reflecting a shift toward more flexible mainstream products and embedded journeys that customers already recognise.

Q: How fast can I go live? A: With a broker and modern APIs, pilots can launch in days, depending on platform complexity, testing, and staff training.

Q: Can I offer sustainable finance options? A: Yes. With around 21% of UK consumers holding at least one sustainable finance product, ESG-aligned lending and disclosures can differentiate your brand.

Q: Will finance hurt my margins? A: Not if priced correctly. Model subsidy against conversion and average order value uplift. Use data to allocate promotions to products with headroom.

What to do next

Map your product price bands, choose your preferred finance mix, and speak to a UK retail finance broker to align permissions, lenders, and pricing. Prioritise a soft-search-first journey, clear disclosures, and robust aftercare. Launch with tight reporting on approval rates, AOV, and customer outcomes, then iterate quickly using real data.

Important information

This article is for general information only and is not financial advice. Finance is subject to status, terms, and affordability checks. Always confirm regulatory requirements and seek professional guidance where needed.