SNPL vs Buy Now Pay Later (BNPL): What’s the Difference?
Both of these models offer many advantages for both the customers and the merchants, mainly when it comes to making bigger purchases. The main difference between save now, pay later and buy now, pay later is that SNPL is based on saving and BNPL is based on credit. By only focusing on saving, SNPL avoids the risk of credit losses that BNPL providers can face.
Even though BNPL has made access to credit much easier for consumers, some of them may still not be eligible for loans. SNPL, on the other hand, puts forward no such obstacles. With a much larger pool of eligible users, SNPL providers have a much larger potential market. And seeing as SNPL targets a very similar customer profile to that of BNPL users, SNPL providers are in the position to take advantage of the rising BNPL trend.
Research has shown that 59% of customers used BNPL for non-essential purchases that they couldn’t afford to pay upfront. There are growing concerns about BNPL’s promotion of unsustainable shopping practices. Compared to BNPL, SNPL not only encourages but also rewards more responsible and more sustainable spending behavior. By incentivizing customers to save in advance of making a significant purchase, SNPL basically protects consumers from falling into a debt trap.
From a merchant’s perspective, both BNPL and SNPL reduce the problem of shopping cart abandonment. Here, SNPL might offer a better long-term solution, as it helps maintain a good customer-merchant relationship without the bad taste that belated payments and fines can bring with BNPL.