“Save Now, Buy Later”, an alternative to installment payments

The BNPL model (“Buy Now, Pay Later”, which means “Buy Now, Pay Later”) has gained importance in the world. And it is that, digital consumers are opting for this alternative to finance their purchases in an installment scheme and, thus, be able to acquire a good instantly and deferring payment in the future.

In Spain, the BNPL grows like foam: a study by the French fintech Algoan revealed that 2 out of 5 Spaniards had already made use of some deferred payment method in 2021. However, while the BNPL is presented as a way to organize and plan personal finances, the debate grows about the need to regulate this tool that can encourage excessive consumption and lead the client to over-indebtedness. To the controversy, we must add inflation and economic uncertainty, which also increase consumer concern about their personal finances.

In response, some fintechs (such as Accrue Savings, Sympl, Monkee…) have started a counter movement called “Save Now Buy Later” (SNBL). This move aims to offer the same user-friendly payment experience as BNPL, but without pushing people into credit. In effect, this alternative consists of helping the consumer to save in advance the necessary money for foreseeable expenses, a safer and healthier dynamic when it comes to personal finances. Basically, it is a principle that our grandparents already knew: save first, spend later, and not the other way around.

The “Save Now, Buy Later” method is a proposal that arises in a context in which marketplaces and digital retailers around the world have made BNPL the most attractive payment option to increase customer satisfaction and retain to buyers. Unfortunately, however, the BNPL has moved more and more in the direction of satisfying the classic desires of consumers even if you don’t have the money to do so.

It is not a secret that BNPL methods are ideal for delaying and splitting the payment of any purchase that is based on an aspect of need, but as long as awareness is maintained in the act of purchase, which is often not the case. In this sense, impulse purchases can be increased with this type of model, which can lead to future economic and financial problems.

MANGOPAY technologyversatile and scalable, helps our partners to evolve and adapt their business to new contexts and needs. This is exactly what our partner Monkee has valued through its SNBL tool. Although they have not yet reached Spain, this tool is booming in Europe. The model that the Austrian company pursues with its application is precisely that of “Save Now, Buy Later” (SNBL), whose idea is to encourage consumers to save the necessary money in advance for foreseeable expenses, so that it is available when needed. . Applications of this style can help the user to accumulate financial reserves and save more money for their own goals. In addition, through gamification and digital pushes, this type of application motivates people to save even small amounts in between, showing that they can add up to quite significant amounts throughout the month without the feeling of doing without them. With each click, the user is once again a few euros closer to their savings goal and, through digital “high fives”, they begin to establish positive connections with savings. However, SNBL also brings benefits to marketplaces and digital retailers as platforms can build closer and longer-lasting relationships with their customers.

Specifically, the Austrian company Monkee is not about investments, but about creating wealth using a well-known and proven method: saving. As an app, Monkee helps its users create savings plans and set savings goals. Simply, according to the motto: what you don’t spend, you still have. Or, as its founders say: “Save now, pay later”, as a responsible alternative to the “buy now, pay later” principle.

For its part, MANGOPAY, a payment solution for marketplaces and crowdfunding platforms, is associated with the Austrian company Monkee, which applies the SNBL by helping its customers save through gamification and encouraging penny-by-penny savings. And it is that financial education will always be necessary to understand the proliferation of new payment models such as BNPL. Only then will consumers be able to learn healthy savings behavior and integrate it into their daily lives.