This Week in Consumer Financing: AI Lowers Delinquency as Lenders Rebrand

The point-of-sale landscape is currently undergoing a dual transformation: a technical shift toward AI-heavy underwriting and a structural shift in how the industry’s biggest lenders present themselves to the market. For retailers, this means more stable credit availability, provided you are partnered with the right firms. ## The AI Efficacy Era and Lending Expansion We have moved past the hype cycle of AI into the era of measurable results. LendingClub—which is rebranding to Happen Bank—reported that its AI-driven underwriting model slashed auto loan delinquencies by 40%. This is critical data for operators. If lenders can more accurately predict who will pay, they can approve more of your customers without taking on toxic risk. Similarly, AI is shifting from a 'fraud cop' to a 'sales enabler.' New tools from companies like FormPiper and Adyen are helping lenders move from basic fraud detection to deep investigation. This reduces 'false positives'—those frustrating moments when a legitimate customer is denied financing because a legacy system flagged their data as suspicious. In the home improvement sector, the fight for market share is heating up. PowerPay secured a massive $360 million in new funding and bond placements to fuel projects in residential solar and clean energy. Not to be outdone, LendingClub has formally entered the $500 billion home improvement market through a partnership with Wisetack, offering contractors bank-backed digital financing to help close high-ticket renovation deals. ## Market Consolidation and Merchant Risks The "secondary" and lease-to-own (LTO) markets are seeing significant divergence. Progressive Leasing continues to dominate, securing an exclusive partnership with American Signature Furniture (Value City) and breaking ground on a new headquarters. This signals long-term stability for furniture retailers who rely on 'no-credit-needed' options to drive volume. However, the bankruptcy filing of FlexShopper serves as a stark reminder: retailers must audit their financing stacks. If your secondary or tertiary lender is facing liquidity issues, your checkout conversion will suffer. On the brighter side, Splitit has moved to private ownership with a $50 million infusion from Motive Partners. This move allows them to focus on their white-label installment technology, which is increasingly being embedded into AI shopping assistants to capture spend at the point of discovery. ## Faster Rails, Higher Risks The industry is moving toward 'instant' everything, but speed has a price. Faster payment rails are beginning to unlock billions in stalled healthcare payouts, which will eventually mean more liquidity for patient procedures. However, as PYMNTS reports, instant payments remove the 'buffer time' for merchants to fix errors. With UK Finance reporting £1.3bn in payment fraud losses, and Wells Fargo tightening its grip on consumer credit by ending sales-quota-driven banking, the message for retailers is clear: The 'easy' money of the last decade is being replaced by 'smart' money. You need financing partners who use advanced identity verification to keep friction low while protecting your margins from the rising tide of sophisticated fraud. Expect a tightening of traditional credit bars through the summer, making diverse, AI-backed multi-lender platforms essential for maintaining high approval rates at the register.