Save Now Buy Later: The Powerful Tool for Economy Building

Save Now Buy Later – SNBL is a forward-thinking financial model that empowers consumers to save towards purchases before making them. Unlike traditional methods like Buy Now, Pay Later (BNPL), SNBL encourages individuals to prioritize savings and financial planning.

During my tenure as the CTO for a prominent FinTech company in Zimbabwe from 2014 to 2019, we spearheaded the development of a groundbreaking initiative called “Save for a Cause.” This pioneering concept, while not explicitly dubbed “Save Now Buy Later” at the time, shared fundamental similarities with the latter.

Under “Save for a Cause,” users were empowered to set aside funds with a specific purpose in mind, whether it be for personal savings goals or charitable contributions.

Through our platform, individuals could allocate a portion of their earnings towards various causes, ranging from personal aspirations such as purchasing a home or funding education to supporting philanthropic endeavors. The essence of the initiative lay in promoting financial discipline and harnessing collective efforts to achieve meaningful objectives, aligning closely with the principles of “Save Now Buy Later.”

SNBL allows consumers to set aside funds for future purchases, thereby promoting responsible spending habits. Instead of relying on credit to make immediate purchases, users save gradually over time until they have accumulated enough to buy the desired item. This approach fosters financial discipline and reduces reliance on credit, contributing to long-term financial well-being. In this blog post you and I will explores the concept of SNBL, its mechanics, and the advantages it offers to merchants and consumers. This is part-2 to my post from November 2020 on Embedded credit

AILabPage has been promoting a concept or a savings culture “Save For a Cause” since 2017, now known as “SNBL – Save Now, Buy Later”. One distinctive feature of this system is its emphasis on empowering consumers to make future purchases by cultivating saving habits. Unlike traditional methods that demand immediate payment, SNBL platforms enable users to incrementally set aside funds until they reach their desired purchase amount. This innovative approach not only encourages financial discipline but also offers flexibility and convenience for consumers to effectively plan and achieve their financial goals over time.

What is Save Now, Buy Later (SNBL) ?

If you haven’t already, I encourage you to check out my November 2020 post on Embedded Credit, along with a brief introduction to SNBL, for a deeper understanding. Unlike Buy Now, Pay Later (BNPL), SNBL operates on a contrasting train of thought. Here are a few examples:

• Saving for School Fees
• Planning for Travel Expenses
• Building a Home Fund
• Creating an Emergency Fund
• Saving for Retirement

This list can be expanded further, encompassing various financial goals. Key stakeholders in this ecosystem include banks, wallet systems, consumers, Fintech companies, merchants, and more.

SNBL encourages gradual savings for future purchases, fostering financial discipline. Embedded credit seamlessly integrates credit facilities into digital platforms, providing access to funds and stimulating economic growth.

Save Now, Buy Later (SNBL) revolutionizes traditional purchasing dynamics by empowering consumers to defer payment for goods and services. Unlike immediate payment methods, SNBL allows users to make purchases upfront and settle the payment at a later time, often in installments or within a specified timeframe.

• Flexible Payment Options – SNBL offers consumers various payment options, including installment plans and deferred payment schedules, allowing them to choose the method that best fits their financial situation.
• Enhanced Budgeting Capabilities – With SNBL, consumers can effectively budget their expenses by spreading out the cost of purchases over time, preventing financial strain and unexpected expenses.

This innovative model not only provides consumers with greater flexibility and convenience in managing their finances but also promotes responsible spending habits. By offering the option to delay payment, SNBL encourages consumers to plan their purchases more thoughtfully, thereby enhancing their overall financial well-being.

How Does SNBL Work?

In SNBL, users typically deposit funds into a designated savings account or platform. They set savings goals and contribute regularly until they reach the required amount for their intended purchase. Once the savings goal is met, the user can proceed to buy the item without incurring debt or interest charges. Some SNBL platforms offer additional features such as automated savings, goal tracking, and incentives to encourage consistent saving behavior. The three steps in which SNBL works are

• Firstly, SNBL encourages users to save towards their desired purchases, fostering financial discipline and planning.
• Once savings goals are met, SNBL provides flexible payment options, allowing customers to complete transactions conveniently.
• Integration with merchants ensures a seamless experience, enabling users to utilize their accumulated savings directly for purchases, enhancing overall convenience and accessibility.

• User Interaction – Users engage with the SNBL platform to set savings goals, accumulate funds, and facilitate purchases.
• External Systems Integration – The SNBL platform integrates with external systems such as banks for fund transfers, credit assessment services for evaluating user creditworthiness, and payment gateways for transaction processing.
• Bank Integration – Facilitates fund transfers between users’ bank accounts and the SNBL platform’s savings accounts.
• Credit Assessment – Utilizes credit scoring algorithms to assess users’ creditworthiness and determine their eligibility for SNBL services.
• Payment Gateway – Enables secure transaction processing between users and merchants for purchasing goods or services.
• Risk Management – Manages various risks associated with SNBL operations, including fraud detection mechanisms and credit limit management to mitigate financial risks.
• Fraud Detection – Implements measures to identify and prevent fraudulent activities within the SNBL platform.
• Credit Limit Management – Monitors and adjusts users’ credit limits based on their financial behavior and creditworthiness to ensure responsible lending practices.
• Core Banking System – Supports bank integration by providing core banking functionalities such as account management and transaction processing.
• Merchant Services – Offers merchants the necessary infrastructure to accept payments from SNBL users for their products or services.

SNBL promotes responsible spending, while embedded credit enhances financial inclusion, benefiting both consumers and merchants with tailored financial solutions and opportunities for growth.

Innovative Payment Solution

While BNPL has gained popularity for its convenience, it’s not without its drawbacks, such as potential overspending and interest charges. In contrast, this emerging payment approach provides a fresh perspective, prioritizing responsible spending and financial empowerment. By combining elements of BNPL with innovative solutions, it seeks to revolutionize the way consumers and merchants interact in the payment landscape.

This innovative concept not only fosters responsible financial habits but also empowers individuals to make informed decisions about their expenditure, setting a new standard for consumer finance.

• SNBL enables businesses to assist customers in saving up for their desired goods or services.
• Customers use SNBL apps to define their savings objectives and track their progress.
• Once the savings goal is met, the platform notifies the merchant, who then facilitates the purchase.

Save now, buy later (SNBL), alternatively known as save now, pay later, represents a novel paradigm in the realm of financial transactions. It amalgamates the principles of saving, investing, and spending, garnering increasing attention within the embedded finance domain. Unlike the conventional buy now, pay later (BNPL) model, SNBL introduces a proactive approach by motivating customers to accumulate funds towards their intended purchases prior to the transaction.

Benefits for Consumers

SNBL revolutionizes consumer spending by encouraging savings before purchases. It empowers merchants with increased sales, customer loyalty, reduced payment risks, and a competitive edge in the market.

1. Structured Saving – SNBL encourages consumers to save money gradually over time, allowing them to accumulate funds for future purchases.
2. Financial Discipline – By setting savings goals and adhering to a predetermined plan, SNBL instills discipline in spending habits, promoting responsible financial behavior.
3. Debt Avoidance – Unlike traditional credit-based purchases, SNBL enables consumers to make purchases without accruing debt or interest charges.
4. Informed Decisions SNBL empowers consumers to make informed purchasing decisions by planning ahead and considering their financial capabilities.
5. Enhanced Shopping Experience – With SNBL, consumers enjoy a seamless and personalized shopping experience, often accompanied by flexible payment options and tailored incentives.

In short it transforms consumer behavior, offering merchants opportunities for growth, enhanced security, and market leadership through innovative payment solutions, ultimately driving business success and customer satisfaction.

Benefits for Merchants

SNBL presents a transformative opportunity for merchants, enhancing their operations and profitability. By offering SNBL options, merchants can boost sales, foster customer loyalty, mitigate payment risks, and gain a competitive advantage in the market.

1. Increased Sales – By offering SNBL options, merchants can attract more customers who prefer to save up for purchases rather than relying on credit. This can lead to higher sales volumes and increased revenue for businesses.
2. Customer Loyalty – SNBL fosters stronger relationships between merchants and customers. Users who save towards purchases on a merchant’s platform are more likely to return for future transactions, enhancing customer loyalty and retention.
3. Reduced Payment Risks – SNBL transactions are typically funded by users’ savings, reducing the risk of payment defaults or chargebacks compared to traditional credit-based transactions. This mitigates financial risks for merchants and improves overall payment security.
4. Competitive Advantage – Merchants offering SNBL options differentiate themselves from competitors by providing a flexible and consumer-friendly payment solution. This can attract new customers and position the business as an innovative leader in the industry.

Incorporating SNBL options brings significant advantages to merchants, including increased sales, strengthened customer relationships, minimized payment risks, and a distinct market position, driving sustained growth and success in the competitive landscape.

Benefits for Economy

Save Now, Buy Later, stimulates consumer spending by encouraging saving before purchases, fostering responsible financial habits. It promotes investment, reduces financial burdens, and ultimately fuels economic growth. In summary, SNBL empowers individuals to make informed financial decisions, contributing to a more robust and prosperous economy.

1. Capital Formation – SNBL fosters capital accumulation among consumers, leading to increased savings and investment, which are essential components for economic growth.
2. Stimulated Demand – By enabling consumers to make purchases without immediate payment, SNBL drives consumer spending, thereby stimulating demand and economic activity.
3. Improved Financial Inclusion – SNBL promotes financial inclusion by providing access to goods and services for individuals who may not have access to traditional credit options, thereby expanding economic participation.
4. Sustainable Growth – SNBL encourages sustainable economic growth by promoting responsible spending habits and reducing reliance on debt-driven consumption, leading to more stable and balanced economic development.
5. Enhanced Productivity – With increased consumer purchasing power and demand, businesses experience higher sales volumes, leading to enhanced productivity, job creation, and overall economic prosperity.

in short it empowers merchants with increased sales, customer loyalty, reduced payment risks, and a competitive edge. It transforms consumer behavior, driving economic growth and fostering financial stability, making it a valuable tool for building a robust economy.

Over All Benefits of SNBL

SNBL offers users the flexibility to achieve their financial goals while making purchases on their own terms. By enabling savings accumulation and personalized financial recommendations, SNBL fosters responsible spending habits and empowers users to reach their desired purchases with confidence.

SNBL allows consumers to make purchases upfront and defer payment, providing greater flexibility in managing their expenses.

1. Budget Management – By spreading the cost of purchases over time, SNBL helps consumers budget more effectively, avoiding financial strain and allowing for better planning of expenses.
2. Avoidance of Debt Accumulation – Unlike traditional credit options, SNBL typically offers interest-free purchases, enabling consumers to avoid accumulating debt while still enjoying the benefits of deferred payment.
3. Enhanced Purchasing Power – SNBL increases consumers’ purchasing power by allowing them to acquire goods and services immediately, even if they don’t have the full payment upfront.

SNBL platforms are user-friendly and accessible, offering convenient payment options that cater to diverse financial needs and preferences.

Challenges and Considerations with SNBL

In the realm of Save Now, Buy Later (SNBL), regulatory compliance mandates adherence to financial regulations, ensuring transparency and legality in transactions. Data security protocols safeguard sensitive customer information, thwarting potential breaches and fraudulent activities. Managing default risks involves vigilant monitoring of payment behaviors and implementing strategies to mitigate defaults, preserving financial stability and trust.

• Regulatory Compliance
  • Ensuring compliance with consumer protection laws and lending regulations etc.
  • Regular audits and assessments to verify adherence to regulatory requirements.
  • Collaboration with legal experts to stay updated on evolving regulations and ensure full compliance.
• Data Security
  • Implementation of robust encryption protocols to protect sensitive customer data during transmission and storage.
  • Regular security audits and penetration testing to identify vulnerabilities and address them promptly.
  • Employee training programs to raise awareness about data security best practices and protocols.
• Managing Default Risks
  • Utilization of advanced analytics and predictive modeling to assess the risk of default for each transaction.
  • Establishment of clear policies and procedures for handling default cases, including communication protocols.
  • Synch-up with credit bureaus and collection agencies to recover defaulted amounts while maintaining positive relationships.

In short, SNBL entities must prioritize regulatory compliance to uphold financial integrity, implement robust data security measures to protect customer information, and employ effective risk management strategies to minimize default risks, fostering a secure and trustworthy financial environment.

Strengthening Security for SNBL with Zero Trust Architecture

The below picture for Zero Trust Architecture (ZTA) specifically tailored for Save Now Buy Later (SNBL), emphasizing robust security measures to protect sensitive data and ensure a trustworthy user experience. SNBL’s adoption of ZTA reflects a proactive approach to cybersecurity, acknowledging the importance of continuous verification and stringent access controls in today’s threat landscape.

1. User-Centric Authentication: The architecture prioritizes user authentication through multi-factor authentication (MFA), biometric authentication, and adaptive authentication mechanisms. By requiring users to verify their identity through multiple factors, such as passwords, biometrics, or device tokens, SNBL ensures that only legitimate users gain access to its services.
2. Integration with External Systems: Seamless integration with external systems, including banking services, credit assessment, payment gateways, and merchant services, is vital for SNBL’s operations. However, these integrations are securely managed within the ZTA framework, with risk management and fraud detection mechanisms in place to mitigate potential threats arising from external connections.
3. Microservices for Data Security: SNBL leverages microservices architecture to enhance agility and scalability while prioritizing data security. Services such as data encryption, data loss prevention, data masking, and data tokenization play a crucial role in safeguarding sensitive information throughout its lifecycle, from storage to transmission.
4. Comprehensive Security Components: The architecture integrates various security components to protect against external threats and unauthorized access. Components such as firewalls, intrusion detection/prevention systems (IDS/IPS), web application firewalls (WAF), and endpoint protection platforms (EPP) work together to enforce security policies, detect anomalies, and respond to security incidents promptly.

Through clear visualization of component interactions, the picture illustrates how data flows securely within SNBL’s ZTA framework. Each interaction undergoes rigorous authentication, authorization, and security checks to ensure compliance with SNBL’s security policies and regulatory requirements.

Case Studies and Success Stories

Let’s delve into real-world examples that demonstrate the concept of Save Now, Buy Later (SNBL)

• Sparapay (Defunct) – It is a now-defunct Fintech startup, focused on enabling “Save Now, Buy Later” functionality. Users could connect their bank accounts and set aside money towards specific goals or purchases. Once the savings target is reached, Sparapay facilitated the purchase directly.
• Accrue Savings – A platform that incentivizes saving for specific purchases. Users set goals, contribute funds regularly, and earn rewards based on their savings progress. Partner merchants offer discounts or exclusive deals when using accrued funds for purchases. This encourages planned saving and incentivizes delayed gratification.
• Hubble (India) – An Indian Fintech platform, offers a “Save Now, Buy Later” service for electronics. Users contribute savings towards desired gadgets and can access pre-approved credit (if needed) once a certain percentage of the cost is saved. This promotes planned saving and provides a safety net for users who may not be able to save the entire amount upfront.
• Multipl (India) – Another Indian Fintech startup, operates on a “Save Now, Buy Later” model for various consumer durables. Users set goals, make regular contributions, and earn interest on their savings. Once enough is saved, they can utilize the funds for purchases or receive a voucher for the remaining amount. This combines saving with a future purchase option, encouraging financial discipline.
• Split (US) – A US-based platform, allows users to create “Shared Wallets” for group purchases. Friends or family members contribute towards a common goal (e.g., vacation, gift) and can track progress collectively. Once the target amount is reached, the funds are automatically disbursed for the purchase. This promotes collaborative saving and simplifies group financial planning.

Future Trends and Innovations in SNBL

As SNBL continues to evolve, future trends indicate a deeper integration of artificial intelligence and machine learning algorithms to personalize offerings. Predictive analytics will enhance risk assessment, while blockchain technology ensures secure transactions.

Additionally, collaborations with non-traditional data sources and partnerships with fintech startups will broaden access to SNBL services

• Deeper Integration of Artificial Intelligence: AI algorithms will analyze user data to offer tailored SNBL solutions, providing personalized financial recommendations.
• Predictive Analytics for Enhanced Risk Assessment: Advanced analytics will forecast users’ creditworthiness and default risks, enabling proactive risk management strategies.
• Blockchain Technology for Secure Transactions: Blockchain ensures transparent and tamper-proof transaction records, enhancing security and trust in SNBL platforms.

Future trends in SNBL point towards enhanced personalization through AI, predictive analytics for risk assessment, and blockchain for security. Collaborations with non-traditional data sources and fintech startups will expand access to SNBL services, shaping a more inclusive financial landscape.

Furthermore, SNBL’s evolution will be characterized by increased collaboration with non-traditional data sources and fintech startups. By tapping into alternative data streams and forging strategic partnerships, SNBL providers can broaden their service offerings and cater to a more diverse range of users. This collaborative approach not only expands access to SNBL services but also fosters innovation, ultimately shaping a more inclusive and accessible financial landscape for all.

Conclusion: Save Now, Buy Later presents a mutually beneficial arrangement for both consumers and merchants alike. SNBL fosters a culture of responsible spending and prudent financial management among consumers, enabling them to make purchases without the burden of immediate payment or accruing debt. Meanwhile, merchants stand to gain from SNBL’s ability to drive higher sales volumes, foster customer loyalty, and mitigate payment risks. Embracing SNBL not only enhances the overall shopping experience but also positions businesses for sustained success in today’s fiercely competitive market environment. Sadly, BNPL has and will always have the upper hand against SNBL. As BNPL grows out of customer need and merchants’s greed, supported by endless promotions

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Points to Note:

it’s time to figure out when to use which tech—a tricky decision that can really only be tackled with a combination of experience and the type of problem in hand. So if you think you’ve got the right answer, take a bow and collect your credits! And don’t worry if you don’t get it right.

Feedback & Further Questions

Besides life lessons, I do write-ups on technology, which is my profession. Do you have any burning questions about big data, AI and ML, blockchain, and FinTech, or any questions about the basics of theoretical physics, which is my passion, or about photography or Fujifilm (SLRs or lenses)? which is my avocation. Please feel free to ask your question either by leaving a comment or by sending me an email. I will do my best to quench your curiosity.

Books & Other Material referred

• AILabPage (group of self-taught engineers/learners) members’ hands-on field work is being written here.
• Referred online materiel, live conferences and books (if available)

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