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If BNPL, then why not PNBL? (Kartik Swaminathan)

While we have seen phenomenal growth in the BNPL (Buy Now Pay Later) segment in recent past, and I have already done a post on BNPL stating how the product is digital native, helping to expand the market and improve conversions for merchants too.

So, while we have BNPL, my take is why not also have PNBL – Pay Now Buy Later. While
BNPL is Lending + Payment, PNBL is Savings + Payments.

This is not just a play of words and, as I illustrate below, it makes perfect sense as a product and has even existed in various forms.

  1. This approach was used in purchase of Gold, where many Gold Merchants had schemes asking people to invest say across 11 monthly instalments, with the 12th Instalment contributed by the Merchant. The corpus accumulated, is the used to fund the purchase of Gold after 12 months. Though this was later discontinued due to regulatory reasons. It was a very popular scheme.
  2. Many other assets like Car & Home are usually prebooked and bought by making some form of down payment or advance.
  3. Many individuals are already doing so by making regular savings so as to purchase a product / asset at a later date.

It is not just the above, I present some more compelling points for PNBL.

–          PNBL can be used as a planning and budgeting tool viz. encourage savings discipline & Goal orientation.

–          PNBL will do well with aspirational products, say a Mobile, Laptop, Holidays, Bike, Car or even Education etc. can be prebooked and instalment paid in advance. So, edtechs, travel techs, ecomm players are you listening?

–          Unlike BNPL, PNBL offers no credit risk.

–          With assurance of demand and no credit risk, a better discount can be offered on the product, better inventory planning and efficient supply chain.

–          Even a price lock / protection can be offered, against future price movements. This is as allowed by regulations and availability of ecosystem to enable.

–          PNBL scores high on ESG, as it offers a more sustainable model with win-win for Consumer, Merchant, Manufacturer & PNBL Provider. No forced spending, no defaults, no hypothecation, no debt spirals, less wastage and better product usage. ESG Proponents just push for this.

PNBL is a very good proposition especially for neo banks and wallets too, as a complete digital ecosystem along with product tie up can be done, and offered to customers. So, just like a Pay later or EMI Schedule in BNPL. PNBL can have a Saving schedule with discounted prices linked to various products.

Sounds interesting!

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