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SNBL Vs. BNPL: Which Is Better?

BNPL (Buy Now Pay Later) is a popular term in the credit industry. Klarna (one of the most well-known BNPL players on the market) recently raised $639 million at a valuation of $45,6 billion, making it Europe's most valuable startup and demonstrating that investors anticipate continued exponential growth for this service.

This anticipated growth stems from consumers' increased aversion to revolving credit lines, such as credit cards. As a result, consumers seek out less expensive, more user-friendly, and convenient alternatives. This offer appears to be particularly appealing to the younger generation, with 15% already using BNPL, which is five times more than older generations.

The Money 2.0 Conference sheds light on how Fintechs have consequently started providing these services. Additionally, incumbent players like PayPal and American Express have entered this market.

Although many people applaud this new product for its user experience and convenience, along with its promise to offer zero-interest rate credit to nearly anyone, many experts are skeptical of this new trend, fearing it will trap people in unnecessary debt for products they don't even need.

But what exactly is BNPL, and where is all this hype coming from? And how does it differ from traditional consumer credit cards or 0% interest consumer installment loans that car dealers, electric appliance stores, or kitchen/bathroom dealers have been offering for years? BNPL is the modern, digital equivalent of those consumer installment loans.

Industry professionals will highlight such questions at the much-awaited accounting and finance conference. Let's understand some of the basics:

Which Is More Sustainable?

While it appears to be a more transparent and user-friendly solution than credit card payments at first glance, it may be even more dangerous to push people into debt.

In response, a few Fintech startups have raised capital to launch a countermovement called "Save Now Buy Later" (SNBL). This movement seeks to provide the same user-friendly embedded (payment) experience as BNPL without requiring people to take out credit. Instead, it encourages people to save for something they've seen at a store and then purchase it once the required amount has been saved (so buy it in the future).

SNBL implements a journey to create and maintain a good customer relationship and engagement. In contrast, the customer saves the necessary amount to purchase the desired object/service.

The benefit is that SNBL offers a solution for customers abandoning their cart due to a lack of funds and for abandonment if a product is no longer available in the required quantity/size/color/model.

SNBL could provide a method to avoid customers switching to another merchant while the product is returned to the store. It also enables interaction with a customer before he decides to make a purchase, i.e., when saving, the customer can abandon at any time for free, i.e., he will only lose the previously accrued cash incentives. This allows a merchant to engage with a customer earlier, lowering consumer acquisition costs.

According to experts at the international finance events, the BNPL movement is experiencing a first consolidation movement, incumbents are quickly catching up, and the SNBL movement is still in its early stages. This gives Fintechs and incumbent banks exciting opportunities to invest in this movement. SNBL has enormous potential in a world where merchants go to great lengths to reduce shopping cart abandonment.

08/25/2022 - 10:22

Jhanvi Saxena

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Jhanvi Saxena
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Jhanvi Saxena
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Jhanvi has been with the Money 2.0 conference team for some time now, which is how she developed her great interest in all things finance related. A true enthusiast of cryptocurrency, cybersecurity, internet financial fraud detection, and scam investigation - Jhanvi aims to educate those around her on all aspects of managing their finances so they can deal with any form of misinformation or fraudulent investments.Jhanvi has been with the Money 2.0 conference team for some time now, which is how she developed her great interest in all things finance related. A true enthusiast of cryptocurrency, cybersecurity, internet financial fraud detection, and scam investigation - Jhanvi aims to educate those around her on all aspects of managing their finances so they can deal with any form of misinformation or fraudulent investments.