Versatile Credit Lands Growth Investment From PSG

Credit platform Versatile Credit has earned the confidence of growth equity firm PSG.

The Pennsylvania-based company announced Wednesday (Sept. 13) that it had received a strategic growth investment from PSG, which it will use to expand its go-to-market infrastructure, its relationships with lenders, and move into new merchant categories.

No financial terms were released.

“Our momentum to date reflects what we believe is a market opportunity for Versatile as well as for the merchants, lenders, and consumers we are proud to serve,” Versatile Credit CEO Ed O’Donnell said in a news release provided to PYMNTS.

“We are grateful for the opportunity to partner with PSG, a firm with a strong heritage in fintech investing that can provide the resources and domain knowledge we believe will be critical to the successful execution of our strategic growth plans.”

Versatile Credit provides an omnichannel platform that lets merchants and lenders connect with and lend to consumers at the point of sale, working with merchants in sectors including furniture, elective medical services, dentistry, home improvement and car repair.

“In all the verticals we service, financing is becoming a key component of a retailer’s growth strategy,” Vicki Turjan, the company’s president and chief operating officer, wrote earlier this year for PYMNTS’ “What’s Different?” series.

“Merchants are leveraging financing offers to attract customers and convert shoppers at all levels of the FICO spectrum into buyers,” she wrote. “Merchants across various industries recognize the power of promotional financing in driving interest and growth and are making it an integral part of their sales approach.”

PYMNTS also spoke last month with O’Donnell about how the advent of FinTechs and digital products, including BNPL (buy now, pay later), has pushed traditional lenders to diversify, enhance and expand their offerings to stay competitive.

“Just having the old-fashioned retail private label credit card out there is not enough to win business and, more importantly, keep the business after you’ve won it,” O’Donnell told PYMNTS CEO Karen Webster.

At the same time, the credit landscape is evolving, with new credit card applications up around 25%, even as rejection rates hit 22%, their highest level in five years.

“What we’ve seen is that using the old metrics such as approval rate and take rate is not enough,” O’Donnell said. “You really have to focus on what’s the throughput. And we have seen that even in households making well over $100,000 in annual income, they’ve moved in many cases from the prime credit box to the near-prime credit box for a variety of different reasons.”