The Growing Trend of ‘Save Now, Pay Later’

Interview with Emily Renny, Senior Director at Checkout.com

FB: Can you explain the concept of “Save Now, Pay Later” (SNPL) and how it differs from the traditional “Buy Now, Pay Later” (BNPL) model?

ER: Buy Now, Pay Later is a form of short-term credit enabling consumers to purchase goods or services, while spreading out the cost over future installments. On the other hand, Save Now, Pay Later (also known as Save Now, Buy Later, SNBL) is a fusion of saving, investing and spending that has taken off in the embedded finance space. It’s a strategy for businesses to employ to help customers save up to purchase its goods and services. SNPL apps support customers in setting savings goals. For the customer, it’s essentially a short-term savings account, and for the merchant, it’s a line of interest free credit. 

In short, BNPL encourages customers to make purchases they may not yet be able to afford, whereas SNPL invites customers to make a purchase once they have saved sufficient funds to do so.

FB: Where is the fun for the consumer with SNPL if they cannot get what they want now and need to save?

ER: This isn’t about taking away the ability for the customer to purchase what they want to, when they want to – they will still have the option to purchase straight away either directly with sufficient funds or by using a BNPL option. SNPL can be offered as an additional option – it gives customers who perhaps don’t have sufficient funds to purchase the item the choice to save for it. Additionally, businesses can offer rewards to customers as they reach certain saving milestones, which is a great way to inject some fun for the consumer into the process. Overall, SNBL provides more payment flexibility to customers.

FB: How does the SNPL model enhance the customer shopping experience compared to other payment options?

ER: Offering a SNPL can provide many benefits to the customer. It means the customer does not have to take on debt when purchasing something that they have insufficient funds to purchase. Because there is no debt taken on, this also means that credit checks are not required, which is important for financial inclusion. Many SNPL programs also offer rewards for customers to incentivise saving, and they can be seen as another way to help budget or achieve financial goals. All in all, SNPL can be offered as part of a diverse mix of payment methods which gives customers more flexibility and choice.

FB: How seamless is the integration process for merchants who want to offer SNPL to their customers?

ER: Checkout.com is well poised to help any businesses with SNPL, or any other payment processing needs – be it the tools, the technology, or simply a bit of information.

FB: In which industries is the SNPL model applicable? Do you see potential in sectors like real estate and construction? What future developments or innovations can we expect from Checkout Company in relation to the SNPL model?

ER: There are two main categories where SNPL can work well: saving for large planned purchases or encouraging smaller recurring purchases. When consumers know they will need to purchase something big within the next few months or a year, for example a new laptop or a washing machine, they can use SNPL to set a savings goal, so they know they’ll be able to buy the new product when it is needed. For recurring purchases, businesses can use SNPL to give incentives to consumers for pre-funding regular purchases through their account with them. The business can earn yield on these pre-funded amounts to be able to give discounts and incentives to customers, building customer loyalty. An example of this might be a regular coffee order at a coffee shop.

There is potential for SNPL to work in any industry where the consumer knows they want to purchase a large ticket item at a certain point in time, including real estate and construction for more modest work, for example re-doing a bathroom, as this is a project that a consumer might feasibly be able to save for within a timeframe that would keep them engaged.

FB: How do you envision the SNPL model evolving over the next few years?

ER: Save now, buy later is still only an emerging payment method. However, it’s one we expect only to gain in popularity and traction in the coming years.

About Checkout.com

Checkout.com processes payments for thousands of companies that shape the digital economy. Our global digital payments network supports over 145 currencies and delivers high-performance payment solutions across the world, processing billions of transactions annually.

With flexible and scalable technology, we help enterprise merchants boost acceptance rates, reduce processing costs, combat fraud, and turn payments into a major revenue driver. Headquartered in London and with 16 offices worldwide, Checkout.com is trusted by leading brands such as Sony, Shein, Sainsbury’s, Wise, Patreon, GE Healthcare, Rail Europe, and The Financial Times. Checkout.com. Where the world checks out.

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