The $300m raise by Affirm last week provides further evidence of the continuing success of the more recent entrants to POS financing market.  Companies like Affirm, Kreditech and China Rapid Finance have brought yet another source of disruption to the credit card/store card model of consumer finance. These innovative customer-focused businesses have developed financial products that offer cheaper and easier alternatives and continue to gain greater traction with consumers. Even in the US, where credit card loyalty has historically been strong, the next generation of consumers is increasingly turning away from the card schemes to these alternative credit options to fund their larger asset purchases.

As companies such as Afterpay, Zipmoney and Ourpay also build momentum with retailers across many countries with their consumer-facing, receivables-financing instalment products, the consumer has an ever growing array of options when looking to finance their spending.

Whilst there will still no doubt be many new entrants, the next 12 months must surely see the start of the rationalisation of the crowded and competitive POS Financing arena as the real winners start to emerge and the incumbents continue to evolve their offerings.  We see M&A playing a key role as the leaders scale their businesses by expanding into complementary geographies and developing more comprehensive product portfolios.