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How Katapult is Giving Brands Access to Otherwise-Forgotten Customers

Learn how Orlando Zayas, CEO of Katapult, is creating more buying options for non-prime customers and what that increased access could mean for brands.

Photo by Pickawood on Unsplash

There are certain things many of us take for granted, including making purchases on our credit cards. It might surprise you to learn that 40% of the population is actually considered non-prime. This means they have either been turned down for a credit card, have bad credit or have no credit at all. These people are often denied the ability to make purchases, particularly on large goods, like appliances or furniture. But what if they could be given the opportunity to make those purchases? What if they were given the chance to make payments based on their own ability on their own schedule? That would not only open up a new customer pool for brands, but it would provide a way for a large group of people to build credit in a meaningful way.

Katapult is making all of that possible.

“I really felt that ecommerce is the future and this non-prime consumer didn’t have the capability to shop online because they didn’t have the credit to do it,” Orlando Zayas, CEO of Katapult, said. “And so they might not have a credit card or they’re maxed out on their credit card and so they had limited options on ecommerce, but yet they were shopping online. And I liked the idea of providing very clear, very transparent, transactions to customers so they can make an educated decision.”

When customers shop online, Zayas wants to give them options and information about how they can pay for the durable goods they need for everyday life. He explained that what Katapult is offering with its lease-to-own option is different from more common buy-now-pay-later offerings.

“Buy-now-pay-later is really a function that took off in recent years and I call it the split four,” Zayas said. “So you can buy a pair of jeans and split it over eight weeks, and there’s no interest and you just pay four payments over eight weeks on your credit card or debit card… and so that has exploded because you can buy things and split the payments and makes it maybe a little easier. Where it gets a little tricky — and where I think lease-to-own comes in — is on the bigger ticket items. Once you get over $300, splitting it over four payments may be a little bit more difficult, especially when you get into appliances like a thousand-dollar refrigerator, for example. You’re going to have a hard time splitting it over four payments. Then if you look at the demand from the consumer, if the customer has access to credit, they’ll probably find another way to pay it. They might have a credit card they can put it on, they might apply for the private label financing and they can figure out a way to pay for it. It’s the customers that don’t have access to credit where lease-to-own comes in because we can approve people that got turned down for the credit card or maybe don’t have access on their current credit card to put it on, but they need that item and they need the furniture.”

By giving customers this kind of option, Katapult is putting the prospect of ownership into the hands of people who, in the past, were scrambling to make due with meager options.

“I really felt that the non-prime consumer you’ve got to handhold them,” Zayas said. “You’ve got to listen, you’ve got to be there when they run into financial difficulties, you’ve got to give them options to try to get to ownership. Nobody wants to miss a payment. I really do believe that most people are good people and they want to make their payments. And so how do you help them get to that point?”

To learn more about how Katapult is making online shopping more accessible and how that benefits customers and retailers, tune into Up Next in Commerce.

Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Learn more at salesforce.com/commerce

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