Ally expanding into retail point-of-sale lending

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Ally Financial will begin offering point-of-sale retail loans under a new partnership between its personal lending business and Mastercard’s Vyze unit.

The $184 billion-asset Ally said in a press release Tuesday that it will offer consumer installment loans on Vyze’s platform for a variety of retail goods and services, including home improvement, exercise equipment and consumer gadgets. Ally’s installment loans will range from $500 to $40,000, with an interest rate between 9.99% and 26.99%.

“Mastercard's deep experience in global payment and technology positions Vyze as a leader in the point-of-sale lending market,” Hans Zandhuis, head of Ally Lending, said in the release. “Together, our partnership gives merchants, who want to offer consumers trusted and stable installment loan options, a powerful, digital option."

Based in Austin, Tex., Vyze connects merchants with lenders to provide installment loans at the point of sale, betting like many others do that younger consumers will prefer those loans over credit cards. Mastercard acquired Vyze last year.

Point-of-sale lending has taken off in recent years in part because the technology needed to make these loans has become much more available to smaller merchants and contractors. It has also proved popular with younger consumers, who don’t have home equity to draw on or prefer fixed monthly payments over the unpredictability of a credit card.

Ally entered point-of-sale lending last year when it bought Health Credit Services, an unsecured personal lender that specialized in financing medical procedures. It later rebranded Health Credit Services as Ally Lending.

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Consumer lending Point-of-sale Ally Financial Mastercard