Here at fintechreviews.co.uk we understand that if consumers can buy something and pay back money over time, they are more likely to buy more products and at a higher price. Bread, a US start-up fintech is trying to get consumers to do away with credit card purchases.

Usually if a consumer is shopping online, they will use their credit card to make a purchase, this is the tried and tested method of payment, but credit cards usually have higher interest rates than consumers like. This could put people off purchasing items with a bigger price tag online.

Bread´s business idea is to develop their own repayment system and offer it to retailers. The benefit in this is that they can offer a range of different interest rates that can be chosen by the retailer, as well as the amount of time it needs to be paid back in. The company was founded in 2014 in New York with the idea that retailers should be able to offer their own branded finance in an attempt to build customer loyalty.

Huge investment in alternatives to credit cards

Fintechreviews.co.uk reports that Bread has raised $128 million in an effort to fund these larger online purchases. Bread raised it´s funding after a series B funding round. The new cash injection will help Bread to get more online retailers on board with their new funding option.

More options for retailers and consumers alike

Bread aims to work more closely with the retailers than any credit card supplier would. Bread will develop a brand´s personalised finance scheme, with choices of interest from 0% to 29.99% and choices of repayment times from 3 to 48 months.

This could eliminate the use of store cards that are offered by companies like Macy´s and Tiffany´s. Bread co-founder and CEO Josh Abramowitz says: “Private-label solutions were built for an earlier era. It’s quite striking that 20 years into the internet revolution so much of the core of banking has not yet changed.”

Other companies have been making similar moves to provide finance services. Affirm, PayPal Credit, and Klarna have been racing to get their finance out there. To see who, if anyone, wins this race, stay tuned to fintechreviews.co.uk.