In an age of tremendous digital transformation where consumers have faster access than ever to more products and services, why be goofy if you can be transparent? So goes the thought of Jason hogg, the recently hired executive vice president of the Privileged rental Unit of Rent-A-Center, which aims to take the lease-buy segment of the alternative credit market to the next level with its recent Acima acquisition.

“When I looked at leasing and capital leasing, there was a lot of room for improvement. It was always awkward, ”Hogg told PYMNTS’s Karen Webster in a recent interview.

Not only were people “typing 30 fields with their thumbs on their phones,” Hogg said, but the whole qualifying and buying process was archaic and full of friction. Essentially, it was time to build a better native, accessible, and fast mousetrap.

“So we made it up,” Hogg said. “We took the [leasing purchase] the counter experience where people have had to go through this arduous process, where you now insert the last four digits of your social security number, and from the beginning until their hire-purchase line their being available also takes 38 seconds, instead of 20 minutes. “

Serve consumers, help businesses

From a consumer perspective, Hogg said, unlike traditional financing with installment loans or unsecured credit cards, people actually own what they buy, which can make a huge difference to customers who often have lower income, are unbanked, underbanked, or have little or no credit. drop off.

“If you stop paying a credit card bill or stop paying your installment loans, your credit is obviously negatively affected. With us you have the option of returning the item, ”Hogg said. “So if you decide that due to a change in circumstances you cannot make the payments, you are not stuck with this debt because it is not a debt, it is a lease and we therefore have the possibility for you to return it to one of our 3,000 Rent-A-Center locations. ”

However, when customers make timely payments, Preferred reports that the credit bureaus, which for some customers, may be the only credit history information they have.

“This is one positive experience from a credit building standpoint,” Hogg said.

At the same time, thanks to its growing – and acquired – network of partner retailers, Hogg said the rental platform is a boon for many small local businesses, as well as national chains that are boosting the customer base. and incremental income growth.

“I would say [we provide] 15 to 20% incremental growth in sales volume to merchants, because we are able to come from this light file, no underbanked or unbanked segment where these consumers do not have access to traditional financing alternatives ”, did he declare.

Dignity and pervasiveness of access

There is another aspect of the lease to own a business that Hogg says is also important to know. “We treat our customers with dignity,” he said.

Whether they’re looking for a laptop to go to work or keep a kid connected to remote school, or just trying to put new, safe tires on their cars, many Preferred customers wouldn’t have the credit or the money. in hand. to make an unexpected purchase.

“Why does a consumer have to go through this process of refusal, refusal or not having access to the same goods and services as other people, simply because they are not banked or have a file? light or no backrest? ” Hogg asked.

Instead, the ability to make those critical purchases, with as little as $ 49 down, can be life changing.

“Giving them that access in a transparent way rather than having to go through 30 minutes of delivering an untold amount of information and everything is important,” Hogg said. “It is therefore about treating them with dignity and empowering them like any other consumer.”

For business models like lease or buy it now, pay later (BNPL), the pervasiveness of access in terms of payment options is an important differentiator. For some, that means setting up traditional monthly ACH or automatic payment banking options. For others, it may involve using prepaid cards and, in some cases, paying cash at a store.

Huge opportunity

Hogg said he had a wry little smile on his face when he thought about the possibility of scaling this hire-purchase business through an ambitious line of services and products fueled by technology and low-friction experiences that help solve a buying problem for consumers and grow. Of the.

“It starts with a transaction and a trust and then turns into a relationship,” he said, “and from that relationship we are able to evolve them into products and services that will help them. empower and continue to provide them with access. ”

While the business model itself is far from new, Hogg said replacing the clunky old version with the modern, transparent variety will tap into a huge market.

“Our addressable universe that we have organized has more than 50 million consumers,” said Hogg, and within that framework, what we already have in our hands today is more than a hundred billion dollars in capacity. capital leases that are turned back. “