Save Now, Pay Later is the latest buzzword on the fintech block, although you would be forgiven for thinking it sounds pretty familiar.
Save Now, Pay Later is a pretty simple concept. You have your eye on something – a new couch, a new mattress, a gift for your partner – and you save up for it.
In a modern digital world, however, the pressures to do the reverse – Buy Now, Pay Later are pretty powerful. But there are downsides.
Save Now, Pay Later company, Accrue, is paving the way and showing that it is pretty cool to save up for something. There is a feeling of achievement, of responsibility and, well, a pretty nice couch in the sitting room. It is a simple idea, made digital.
Most of the good digital ideas are simple.
The advantage of the digital world is that you can add value quickly and without too much cost. Accrue is signing up partners to add this value, partners such as retailers who can encourage customers to save up for the better, more expensive model, receive rewards and points along the way – you know, the now usual digital approach.
Save Now, Pay Later may sound simple but Accrue just attracted $25 million from some senior investors, including Tiger Global.
Making it cool to be responsible with money will attract widespread applause and be enormously beneficial if the concept, and companies such as Accrue, can divert young people from the Buy Now, Pay Later path.
We have worried recently about the idea of Buy Now, Pay Later, as it encourages debt, even if the terms are mega friendly. We are not alone – the consumer protection bureau in the US has demanded information from the top five players, including PayPal.
Fintech, generally, is on a huge roll. Investment in the sector doubled in 2021, as did venture funding across the board (it hit an extraordinary $621 billion, and Unicorns were being created at a rate of over two a day).
It will be fascinating to see what wild, weird and wonderful concepts fintech companies come up with during 2022. The bet is that most will be funded.
The hope must be that enough funding goes into concepts such as Save Now, Pay Later to offset what is beginning to look like an enormous consumer debt issue.