Businesses providing goods to customers on credit is an ancient practice, to put it lightly. The practice has its roots in the earliest human societies; even the Code of Hammurabi – a Babylonian system of laws dating back to around 1750 BC – has provisions for it. Let’s trace a path through history, briefly covering the beginnings of finance, the evolution of retail consumer finance in the United States, and the status of this popular practice today.
The Roots of Finance
In early Mesopotamia, lending was primarily tied to agriculture and followed the natural cycles of planting and harvesting. Laws – such as the aforementioned Code of Hammurabi – were gradually established to govern maximum interest rates, among other purposes. Essentially, early farmers sought credited goods in advance of the sowing season, which they would then pay back from the surplus of the harvest.
That fundamental principle – taking a loan in a time of scarcity to be paid back in a time of plenty – continues to drive a great deal of lending today. Yet, finance has evolved, and one of the ways it has done so is with the growth of retail consumer finance.
The Engine of Finance in the United States
The birth of modern retail consumer finance owes much to the automotive industry. In the early days of automobiles, they were not exactly affordable, even when taking inflation into account. Early automobiles were only purchasable with cash, and that put them out of the price range of many working people.
However, beginning in 1919, Ford and General Motors introduced installment credit plans. GM’s plan – which allowed consumers to take their car home immediately after making a down payment – ultimately proved more successful, but that’s almost beside the point: the engine of finance in the United States was revved up by the demand for cars, and from that point forward consumer finance would grow exponentially.
All sorts of companies began offering products on credit, from kitchen appliances to furniture. The genie was out of the bottle, and the flexibility and convenience offered by consumer finance options would ultimately prove irreplaceable.
Modern Advancements in Consumer Finance
The principles behind consumer finance and its desirability have not changed much since the days of early Mesopotamia. And yet, substantial advancements in the way the consumer finance process works have made it much more convenient for the end consumer.
Consider FormPiper, for example. As a complete consumer finance automation solution, FormPiper bridges the gap between customers who want to take advantage of financing options but hate the slow, sometimes embarrassing application process, and the product or service they want. FormPiper automates the filling of multiple application forms with a single click, allowing retailers to submit finance applications on behalf of their customers to multiple lenders at the same time.
Couple that with convenient self-managed and managed service options, robust reporting from a single, easy-to-use dashboard, and the ability for customers to fill out an application from the device of their choice, and you have a real advancement in the world of consumer finance.
As long as people need products and services, there will be a desire for consumer finance, and FormPiper will be there to make the consumer finance process better than ever for retailers and their customers alike.