Save Now Pay Later Startups Seek To Tie Savers To Brands

A new generation of startups is turning the concept of ‘Buy now pay later’, or BNPL, on its head. Fintechs such as Multipl, Hubble and Tortoise operate on the ‘Save now pay later’, or SNBL, model in which users save money with merchants and benefit from the discounts that come with advance payments. All three platforms, Multipl, Hubble and Tortoise have raised funding. On 12 May, Multipl announced a pre- series round from Kotak Securities and others.

Here’s how it works

Let’s say you want to buy an iPhone. The phone costs 1 lakh and you can set aside 10,000 per month over 10 months for it. There are multiple ways in which you can buy the phone.

First, you can buy it now using a credit card or buy BNPL loan and pay back the lender in 10 instalments (EMIs). Second, you can put the money in a bank FD or debt mutual fund and buy it when your savings reach 1 lakh (helped along by interest). However, there is a third option. In this option, your instalments go to the merchant as advances or they sit in an escrow account with a third party designated for a specific product from a specific merchant (for example, an iPhone). In return the merchant gives you a discount. If you factor in the merchant discount, your ‘return’ on savings is a lot higher than just keeping aside money in the bank.

“Our users for iPhones plan will get a cashback of 10%. We partnered with Imagine Stores (Ample) and partners in the travel and electronics category also. We will initially focus on travel, electronics and jewellery. Your money will go to merchants as advance, but you can change your mind and withdraw your savings at any time before the actual purchase is completed.”, said Vardhan Koshal, co-founder, Tortoise.

The startups have…

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