Retail finance in Spain: 4 things every merchant should know

Ah, Espania. Paella, siestas, tapas, Barcelona, sangria. What’s not to love? 

If you’re reading this the chances are you’re already running a successful enterprise in Spain. Perhaps you are a UK company with a foothold there, or a Spanish company with a base in the UK. And if you’re offering finance in both countries (or thinking about extending your finance programme overseas), you’re likely to have a lender in each country on your radar at the very least.

This is where things start to get complicated. Multiple lenders often means multiple technical integrations, multiple finance programmes, and multiple things to worry about.

But fear not – we’re here to tell you how you can make life less complicated. Here are four things every merchant should know about offering retail finance in Spain, so you can simplify your retail finance programme, smash your targets, and impress your boss.

1. You should offer retail finance in Spain

If you’re new to retail finance and you’re thinking about setting up a multi-country offering, it’s good to understand how shoppers feel about it. 

That’s why we asked nearly 3,000 consumers (1,000 in Spain and nearly 2,000 in the UK) about their interactions with checkout finance. Whether they’ve used it, how much they spend, what they like to buy. To support merchants like you in developing and simplifying your retail finance proposition.

To put it simply, shoppers in Spain and the UK are overwhelmingly in favour of checkout finance. Around six in ten consumers in both countries have used checkout finance in the last three years. Seven in ten Spanish shoppers either agree or strongly agree that checkout finance can help to manage their finances, while nearly six in ten Brits do. 

The figures are even more compelling amongst consumers who have used checkout finance before. Eight in ten shoppers in both Spain and the UK believe it can be used to help manage their finances, and nearly all shoppers are open to using it again. The more people use checkout finance,  the stickier it becomes.

Now consider that checkout finance is the fastest growing payment method globally. The market is projected to be worth $90.51 billion by 2029, up from $22.86 billion in 2022. That’s a compound annual growth rate of 21.7% (for comparison, the credit card industry anticipates a CAGR of 8.7% in the same period). 

For merchants like yourself, that currently translates to higher conversion rates, bigger baskets, better loyalty. But if things continue at the pace they are, checkout finance will be a need-to-have rather than a nice-to-have. Those who do not offer it will be left behind. You should offer retail finance if you do not already.

2. Offering retail finance in Spain and the UK is hard

The trouble is, it’s not easy to offer finance in both Spain and the UK.

That’s because there are (currently) no lenders that facilitate this type of lending. There are pan-European lenders that offer finance in Spain and elsewhere across the continent, and there are UK lenders. But no lenders do both.

This makes things difficult for merchants with a footing in both countries; onboarding a new lender is no small task. 

It begins with market research. That’s a Request For Proposal (RFP) if you’re a large merchant, or in-house scoping if you’re smaller. In both cases you’ll need to understand what you want from your retail finance programme to define a list of technical questions you need answering.

But you also need to understand: Is this lender reputable? How quickly can they get me to market? What’re the commercials like? This takes time. 

Then there’s the onboarding process. You will almost certainly require a bespoke integration if you are a large merchant, which can take months of workshops and engineering. Each lender will require its own integration, so that’s a different technical requirement for your Spanish lender and your UK one. Each integration is time consuming and costly and will most certainly result in sleepless nights.

There’s also the small matter of regulation. UK based merchants will likely need to be FCA regulated as a credit broker – a process that takes three–six months. Similar rules apply in Spain.

3. Maintenance and management is massive work

There’s marketing as well, online and in-store. You’ll want to let your customers know about finance early in their journey, and at every touchpoint. Your website needs to be updated, ideally with a finance page, and a calculator, and signposts on product pages and the checkout. The same is true for bricks-and-mortar. Stickers in the window and reminders by products and the till. In-store staff will need to be trained on the benefits of finance to inform customers. That’s for both countries. And it’ll be different for each lender.

And that’s before the real work has even started.

Maintaining, managing and updating your retail finance programme is a big, expensive commitment. Your retail technical team is likely to be small and overworked, so an integration for each lender is a big ask of them. Maintaining the back-end for two lenders moving forwards is even bigger. You’ll probably need more staff to keep up with the workload, which means more money on top of the pile you’ve already spent to get to this point.

It’s possible, sure. But there’s a lot of work and money and time and risk involved.

You’ve also got to consider whether your lender will stick around. If your lender stops lending you may be left with gaps in your finance programme.

4. Fortunately, there is another way

Divido Connect lets you access reputable lenders in the UK, Spain and five other European countries via a single integration. That means you skip past the pain of finding a separate lender for your operations in Spain (and France, Belgium, Italy, Portugal and Romania). 

We offer configurable integrations for large merchants while supporting major plugins for smaller merchants. And we only work with tier one lenders, so you know your customers are supported with finance they can afford, which matters now more than ever.

A mature, responsible, customer focus ensures your customers are offered the highest standard of lending in Spain and the UK.

What’s more, UK based merchants can offer their customers a second chance at finance applications. Our Finance Matcher product, enabled by Novuna, gives customers who have marginally missed out on finance plans a second chance. Instead of being declined, customers are offered a list of alternative finance plans based on their affordability using advanced soft-search technology. 

For someone who’s set their finance plan £20 too high, Finance Matcher is the difference between buying the items and going without it. It’s really powerful.

For you, that means more of your customers are approved without relaxing your lending standards.

Make more progress with less effort

Our latest product update, Divido Connect, allows merchants selling into the UK and Europe to offer finance via a single integration.