In a brick-and-mortar store you rarely seen an abandoned shopping cart that someone has walked away from during checkout. For online retailers, however, cart abandonment is a big problem.

That's at least partly because there's no shame in walking away from a digital cart while in a store people may notice. Some cart abandonment does not come from a last-minute change of heart, it comes from seeing the price tag and either not having the money or not wanting to spend it.

Nearly half of online retailers believe that there's a remedy for this problem, according to a new report released by Klarna, a leading global payments provider, at Shoptalk in Las Vegas. The study showed that 46% of the online retailers polled believe that instant, online financing would decrease cart abandonment while 64% believe offering it would drive new and increased sales.

A graphic shows that 46% of retailers believe instant financing will help.

Image source: Klarna.

What is "instant financing"?

In many ways instant financing is a variation of getting a store credit card at checkout and immediately putting your purchase on it. It's offered at checkout -- when cart abandonment occurs -- and consumers fill out a basic credit application. If approved they get a revolving line of credit with the merchant that allows them to spread payments out over time without using their own credit card.

"Instant financing is clearly recognized by online merchants as a means to attract consumers by providing additional freedom, flexibility, and buying power," said Klarna North America CEO Jim Lofgren. "The speed and simplicity with which consumers can apply and be approved for instant financing is widely believed to convert more sales."

It's easy to see why this type of offer might appeal to consumers. The shopper gets what he or she wants immediately without preserving their available credit. Of course, instant financing, is just a different form of credit card debt. Many consumers won't see it that way and will view this type of purchase more like layaway but with possession of the items before the balance is paid off.

A person holds a tablet on a desk covered in other items like glasses, a laptop, notebooks, a phone, and a pen.

Instant financing may cut down on cart abandonment. Image source: Getty Images.

How do consumers feel about instant financing?

As you might imagine, the shopping public overwhelmingly supports the idea of being able to get quick, easy credit, in order to put off paying for whatever they may be buying. In fact 75% of those surveyed in another Klarna study from 2017 indicated a preference for online sellers that offer it while 39% said they would spend more money if given instant credit options when purchasing goods and services online.

Merchants would also do well to note that 28% of the consumers surveyed said that they would switch up where they shopped in order to use instant financing. In addition, 47% said they would at least like to be offered the option.

"Our survey of U.S. online merchants provides an intriguing look into the 'sell side' of the instant financing equation, and we've found similar patterns in terms of the growing awareness, acceptance, and integration of this alternative payment option," said Lofgren.

What does this mean?

Giving people more options for not having to pay immediately will almost certainly benefit online retailers. Instant financing is really just a store credit card with new branding, but that's not a bad thing.

Store credit cards are largely responsible for creating brand loyalty. They also give the retailer ways to drive more sales both through marketing and doing things like offering good terms on a new purchase.

This is merely an evolution of something that's already common in retail that has been proven to work. It's hard to see why it would not be successful in the the digital shopping realm.

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