Purchasing Power: Employees Can Finance Products via Payroll Deduction Without Requiring Credit Check

Purchasing Power And Financing Items While Avoiding Credit
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Matt Walker
By: Matt Walker
Posted: June 22, 2021
Experts share their tips and advice on BadCredit.org, with the goal of helping subprime consumers. Our articles follow strict editorial guidelines.

In a Nutshell: Purchasing big-ticket items is a necessity from time to time. But consumers may not always have easy access to the credit they need — or can afford the revolving debt cycle associated with escalating credit — to finance these much needed items. Purchasing Power works with employers to offer a platform that helps people pay for their purchases over time without incurring interest. Rather than running up a credit card bill, with Purchasing Power, individuals can choose from more than 40,000 products and pay in installments over six or 12 months via payroll deduction. Employees receive upfront pricing with no escalating fees or hidden charges so they know exactly what they will pay each month until the item is paid off.

Making large purchases from time to time is essential in modern society. Consumers should expect the occasional unexpected expense, whether it’s a refrigerator going on the fritz or a laptop becoming outdated and slow.

While credit cards offer a convenient way to purchase big-ticket items with less immediate impact on budgets, they aren’t always the best solution for everybody.

Purchasing Power LogoPeople who may already be struggling to make ends meet may not be able to afford the high interest rates associated with certain credit cards. Or folks who have made some financial missteps in the past may not have access to a line of credit. Yet others may simply want to avoid running up their credit card balance for one reason or another.

Consumers who are already facing financial challenges may be forced to turn to high-interest payday lenders or other less-than-ideal solutions to procure pricey-but-necessary items.

But what if there were a better solution?

For employees working at businesses that offer the Purchasing Power platform, there is.

“When life happens, Purchasing Power is here,” according to the company. “Purchasing Power is a voluntary benefit for employees that provides immediate access today to thousands of products, for which they can comfortably pay for over time through payroll deduction.”

Purchasing Power makes it easy for people to avoid tapping into credit when it may not be in their best interest and gives them the ability to purchase an array of products without busting their budgets.

We recently spoke with Bryon Colby, Purchasing Power’s Chief Digital Marketing Officer, to learn more about the company’s background and how it benefits both employees and employers.

Identifying a Need in Credit-Underserved Populations

“This year is a big year for us,” Colby said. “We started the company in Atlanta back in February 2001, so we’re celebrating our 20th anniversary.”

Colby noted that several fintech companies have entered the buy-now-pay-later space, but he said he’s proud to point out that Purchasing Power was covering this market about 18 years before many newcomers in the space.

“When we started out, we were talking to a number of companies, and we found that there was a problem as their employees were not able to go out and purchase personal computers, which were the big thing at the time,” he said. “Even then there were credit-underserved populations.”

Bryon Colby

Bryon Colby is the Chief Digital Marketing Officer for Purchasing Power.

Purchasing Power took note, and in its early years focused on building technology that would allow employees to purchase computers and have the cost automatically deducted from their paychecks over time, Colby explained.

“The whole idea was exploring how to give people that financial flexibility, and looking at how we can really empower people to make smart purchasing decisions,” he said. “We started with just computers. Fast forward 20 years later, and because of customer requests for further products and services, we’ve expanded to over 40,000 SKUs (stock keeping unit).”

Colby said some of the most popular categories in Purchasing Power include computers, home office, electronics and cell phones, appliances, furniture, and automobile tires — even family vacation travel and home entertainment products.

“We have direct relationships with over 350 clients, and over 40 of them are in the Fortune 500,” he said.

Purchasing Power’s headquarters is still in Atlanta 20 years later. It offers its employee benefits platform to large companies (1,000-plus employees) of all kinds and is currently available to millions of employees across the U.S.

How Individuals Can Finance Items With No Credit Checks or Hidden Fees

A major advantage for many individuals who have access to Purchasing Power is its no-credit-check model, which allows people who have low scores or are rebuilding their credit to finance large purchases.

“For the past 20 years, we’ve built up real expertise in that area. The key is that for the majority of our business it is tied to the person’s employment,” Colby said. “It’s great because, when a client comes on board, we’re able to really offer this to their employees, regardless of their credit rating or score.”

He said Purchasing Power, in a way, views a person’s job as their credit.

“We have different spending limits we assign. We have our own technology in the background to determine what the right spending limit is for each customer,” Colby said. “An individual’s salary and tenure are the main inputs that we use across the employees of a given client to set the appropriate spending limit.”

He said Purchasing Power isn’t based on a purely interest rate-driven model. This means employees who purchase items through Purchasing Power won’t have to deal with the kinds of high interest rates associated with many credit cards or rent-to-own models approved for low-income individuals. The company is also transparent in its pricing. It provides the monthly cost up front, and it never changes, which makes personal budgeting much easier for the customer.

“Our model is that we become the merchant of record,” Colby said. “There are a lot of top brand name products available, and we actually purchase those products, and then we are, in a sense, reselling them. It provides valuable access to these in-demand items whereby employees can purchase them more conveniently and manageably over time.”

This model puts the pricing power in Purchasing Power’s hands, and ultimately empowers the employee by helping them make good financial decisions.

“The price on the item is X, and that’s the price that gets paid down over time,” Colby said. “That’s all you ever pay. There are no escalating fees, there is no down payment. That is a big difference in how we’re able to do things. We can say ‘this is your price upfront,’ and it’s full transparency.”

Public Sector and Private Companies Can Set Themselves Apart by Offering Purchasing Power

No matter what industry a company may be in, hiring and keeping great employees should be a major factor in a business’s success. Companies that have employees who are no longer productive (because of personal financial stress), or that see high turnover rates — and frequently spend money training new employees — are not able to maintain an edge over their competitors.

And for many employees, a company simply offering a 401k and a PTO plan as its benefit package is less appealing than a company that also provides numerous voluntary benefits such as the ones offered by Purchasing Power.

Partnership Graphic

Purchasing Power offers a platform with advantages for employers and employees.

“You hired the best people for the job. And you’ve done your best to set them up for success,” according to Purchasing Power. “But it can be challenging to find a balance between driving organizational productivity and building employee engagement. Choosing your financial benefits programs carefully can make all the difference.”

Colby said Purchasing Power has been embraced by two main types of clients — enterprise businesses and public sector entities.

“We do a lot of work in the federal government and public sector space — so different school districts and different federal agencies,” he said. “We also reach across every industry. We serve manufacturing, we serve retail, we serve healthcare, hospitality.”

Public sector employees can often face different sets of challenges than do employees in private companies, according to Purchasing Power.

“Budgets get cut, access to resources shrinks and it becomes increasingly difficult to meet the ever-changing needs of your employees,” according to the organization website. “The right benefits can set you apart and help you retain a great workforce.”

Purchasing Power may be the right solution for you whether you’re an employee looking for ways to finance big-ticket items or an employer looking for appealing voluntary benefits programs to add to your perks package.