Fintech start-up offers alternative to buy now / pay loans later

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A fintech start-up has developed an alternative to buy now / pay later loans that she believes will be safer and more rewarding for consumers.

New York-based Accrue Savings launched a savings account on Wednesday that will initially be offered by seven retailers such as Camp, Casper and Mark Henry. Everyone will decide how to market Incrue to customers and for what products it will be available.

Consumers can still save for large purchases in a regular savings account. But Accrue Savings offers bonuses through retailers, says Michael Hershfield, founder and CEO of Accrue Savings.

“There is an unrealized opportunity when so many innovations have been focused on credit,” said Michael Hershfield, CEO of Incrue.

When consumers find a qualifying item they want to purchase, they can choose a savings schedule, link their bank account, and create an accumulated savings account. A dashboard will follow their progress towards the purchase price. Once that amount is reached, Accrue will send them a debit card linked to that retailer and purchase.

Hershfield said a consumer study he conducted before launching Increased found Americans want to save. “It’s here for retailers to offer payment diversity,” he said. “Not everyone wants to buy today. A lot of people think they’ll buy things in six to nine months. “

Certainly, customers can accumulate money in traditional savings accounts. But Hershfield argues that there are advantages to choosing Increased. Retailers will incentivize savings by offering cash rewards, such as bonuses when customers have reached 25%, 50% or 75% of their goals. Additionally, users can send family and friends a link to their Accurue “wallet” to request additional contributions.

This process is also believed to be safer than buying now / paying off loans later. Tuesday House Democrats expressed concerns on installment loans, which puts consumers at risk of falling behind in their repayments. There are no fees attached to Augmented accounts, and users can withdraw their capital (but not the additional retailer rewards) and transfer the money to a regular bank account at any time.

Accrue has raised $ 4.7 million in a seed funding round and is backed by investors such as Twelve Below, Box Group, Ground Up Ventures, Red Sea Ventures, Good Friends and more. The company will make money from the interchange fees when customers use their Accurue debit cards, as well as a performance fee that it charges retailers when customers make a purchase. Deposits are insured by Blue Ridge Bankshares, a $ 2.8 billion asset company located in Charlottesville, Virginia.

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