Thread by @FinFloww

In 2022, Buy Now, Pay Later apps were minting money by luring people into bad spending habits

But RBI punished them for their mal-practices

Now a new product — Save Now, Buy Later — based on good saving habits is taking India by storm

Here's how SNBL is beating BNPL:

With increasing digitisation, spending money has become as easy as making UPI transfers, and buying everything online with BNPL is the new cool.

BUY NOW, PAY LATER companies have been in the market for a long time and Bajaj Finance was the first one to launch it in 2013.

In the past few years, BNPL has experienced tremendous global growth and has emerged as one of the favored payment methods among consumers who lack a credit history or have a low CIBIL score.

However, it comes with a fair share of problems like getting into a — DEBT TRAP.

To understand that, let’s understand how BNPL works:

For example, your monthly salary at a new job is just 25,000 and you get a midnight craving to buy the latest iPhone worth 70,000.

Remember, you do not have a CIBIL score as you have just started earning.

Major banks will not give you a credit card.

That’s where BNPL comes to your rescue & helps you buy this iPhone right away.

All you have to do is choose BNPL during checkout, make a small down payment, & pay off the remaining balance later as lump sum or interest free EMIs.

It’s just like a credit card, but here you do not have to pay the entire bill at the end of the month

And the credit period can range from 30 days to 48 months. Great, right?

Then what’s the problem here?

BNPL increased your affordability, but that makes overspending easy too.

You pay more because of very high interest rates (as high as 24% p.a.), and also get caught in debt trap.

Moreover, BNPL won’t improve your credit score if you pay your installments on time, but it can hurt your credit score if you fail to do so.

Imagine a product that is a smarter alternative

— where you can still spend on things you want and need, but without getting into any bad financial habits.

SAVE NOW, BUY LATER.

The wheel has come full circle with SNBL.

Remember how in our childhood we used to save money in our gullaks to buy a cricket bat and when it was time to redeem that money our elders also used to chip in a few bucks.

What happens in BNPL is that you tend to buy a lifestyle before you can actually afford it.

But it’s better to work for that lifestyle & make your money work for it, rather than trying to get it before you can afford it and then working to pay back.

That’s what SNBL is helping people with.

The human mind is very good at compartmentalizing debt as a problem for later, but extremely bad at managing it.

Anything you buy with credit will leave a negative effect on you if you buy it when you cannot afford it.

BNPL is targeting such consumers the most who have no control over themselves.

On the other hand, SNBL platforms like MULTIPL enable you to invest for your spends.

You earn returns before you spend, & do not end up taking bad debt.

Multipl helps you achieve the lifestyle you want without any compromise, money stress, or buyer’s regret.

It’s easy, you just need to set up a spending goal on Multipl, & it will tell you exactly how much you need to save & invest every month to achieve your goal.

Basically, the money you save will be invested into commission-free mutual funds which are as per your risk profile and linked to your spending goals, such as going on a holiday or buying a smartphone, and even recurring spends like school fees, insurance premiums, etc.

You can try the Multipl app here & get Flat ₹300 Swiggy voucher on your 1st spending goal: app.multipl.xyz/appinvite

Moreover, BNPL makes a lot of money by negotiating discounts from the brands, but not passing it on to the users (who are hooked) to maximize their margins.

Just like how the no-cost EMI model works.

However, Multipl passes these brand benefits to their users.

This means users get mutual fund returns as well as extra savings from the brand.

So, it’s a WIN-WIN as you can still buy what you want, but in a financially prudent way.

You see, even though BNPL is extremely hooky, the negative aspect of it can lead to aversion, but SNBL on the other hand only leads to a positive outcome.

That’s how in the long run, SNBLs like Multipl can beat BNPL.

#partnership

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