In a tight economy, Accrue's model could have some advantages over traditional BNPL loans, said Ariana-Michele Moore, an advisor in Datos Insights' retail banking and payments practice. 'The savings process creates loyal relationships between consumers and merchants, who can send reminders to Accrue customers or notifications marking milestones as they save up for their purchase,' he said. But Hershfield counters that Accrue's longer-term approach provides merchants with other benefits. One criticism of the 'save now, buy later' system is that it cuts against retailers' perennial eagerness to close sales immediately. Accrue has raised $30 million in venture capital funding to date. 'Customers can apply their saved funds to a specific item or something else on the retailer's site,' he said.Īccrue earns revenue through interchange when the Visa card is used to pay merchants, and merchants separately pay Accrue a fee of about 1% of each item's purchase price, Hershfield said. If a shopper decides to cancel the plan, Accrue returns the saved funds to their linked bank account with no rewards or interest. The $3.1 billion-asset Blue Ridge Bankshares, based in Charlottesville, Virginia, issues Accrue's virtual Visa card New York-based embedded-finance technology provider Unit also provides support.

When the account has enough money to make a purchase, the user clicks a button and instantly receives a virtual Visa debit card, which can be used to purchase the item through the retailer's site. Merchants offer Accrue users rewards that operate as a discount on up to 20% off of the purchase price. Users may invite friends and family to contribute to their Accrue Savings account users may also skip payments or put the plan on hold. We give them a way to earn rewards for specific trips as they wait to accumulate the funds,' he said.Ĭonsumers enroll with Accrue Savings by clicking on a button on a participating merchant's website, and choosing how much they want to contribute toward a future purchase, from $1 a week up to $100 a day.

'Almost all consumers tend to earmark and save up money for trips.

At least two other startups using a similar save now, pay later model - Austria-based Monkee and Malaysia-based Sugar - also primarily target travelers.Ĭonsumers also use Accrue's service to pay for expensive jewelry and furniture, but Hershfield bets travel will continue to be the platform's top use case for the foreseeable future. CheapOair also has a partnership with BNPL giant Affirm.Īfter more than a year in business, travel stands out as one of the fastest-growing categories for Accrue Savings because of persistently elevated prices for flights, cruises and hotel stays, according to Hershfield. One in 10 consumers has paid for travel using a BNPL loan, according to recent data from Lending Tree. 'At least one-third of Americans are saving up for a trip, and as travel costs continue to rise, people are looking for alternative ways to finance these expenses,' said Hershfield.īNPL loans are popular for travel purchases, too.

Used lane venture furniture