We've spoken extensively about BNPL (buy now pay later). Tiger Global has backed a new BNPL with $25 million. Accrue Savings encourages its customers to "save now, pay later" (SNPL), which is a different take on traditional BNPL services.
Traditional BNPL services split a payment at the time of checkout across several months. This allows the customer to make a larger purchase without paying the entire amount immediately or putting it on their credit card. Most BNPL services don't charge any interest, so it's an interest-free loan for customers.
BNPL services have made it simple for merchants to integrate their services. They simply stick a BNPL option on the checkout page, along with all the other payment options, and customers choose to use it or not. Most BNPL services don't even require a credit check. BNPL services make money by charging merchants for the service. However, some BNPL services have a fee-based option (i.e., fixed interest rate) to finance longer.
BNPL generated $100 billion in sales during 2021, which is 4X more than in 2020.
Accrue Savings is a new company but already has 15 large customers, including Allbirds, Casper, Poly & Bark, and Smile Direct Club. Accrue has raised $30 million so far. It launched in late 2021.
Accrue Savings' SNPL service works by letting customers put funds into an FDIC-insured account. When they hit specific savings milestones, they can receive cash contributions from brands. Rather than earning an interest rate, customers basically receive money from various brands. The Accrue account links directly to a customer's bank account, letting them easily transfer funds into their Accrue account.
Customers set goals for a specific item they want to purchase. Once they have saved enough to purchase the item, the Accrue Savings app will notify them.
Tiger Global is a US-based investment firm. They invest heavily in startups.