New Services Enables a ‘Buy Now, Pay Later’ Approach to Weddings

Angela Millin, like many brides-to-be, quickly started planning her wedding after getting engaged in April 2021.

At the top of the to-do list is to choose a date, location, and budget. Both her parents and her future husband offered to help pay for the event, but when Ms. Millin and her fiancé held their wedding in December of this year at the Perez Art Museum in Miami, they was shocked by the various expenses.

“All the upfront costs are pretty staggering,” says Ms. Millen, 32, and business development manager for a creative marketing agency. “Especially all at once.”

On the advice of their wedding planner, Annie Lee of Daughter of Design in Miami Beach, the couple decided to put their wedding on vacation mode, so to speak, using the translation platform. financial services Maroo. Introduced in July 2021, Maroo offers couples the option to pay in installments to its network of providers over a 12-month period, similar to how it works. “Buy Now, Pay Later” Programs offered by companies including Afterpay and Klarna allow people to gradually increase payments for clothes and home goods purchased online.

“To break the cash flow,” Ms. Millen said, “meaning I was able to feel more comfortable with such a large overall expenditure.” For their wedding, the couple are using Maroo to pay for Ms. Lee, their planner, as well as their photographer, videographer and hair and makeup artists.

The average cost of a wedding in 2021 is $28,000, according to one nationwide survey out of 15,000 couples made by wedding planning and registration website Knot. Commercial Group Wedding Report, in a separate study surveyed 1,699 individuals, determining that the average cost of a wedding last year was $27,000.

But when it comes to paying for an event, ex-married couples have little choice but to cover the cost upfront or with regular loans or credit cards. “There is no innovation,” said Anja Winikka, marketing director of Maroo. “You have tons of great planning tools, checklists, and visuals for inspiration, but nothing for the painful process of having to pay for it.”

Personal finance writer Nicole Lapin, who holds an Accredited Investment Trust from the Financial Industry Regulatory Authority, or Finra, advises couples to be wary of the lure of installment plans.

Their postpay aspect can cost users more than they can afford, which is why Ms. Lapin says such plans are best for those who are financially stable. , who can pay the full cost of the wedding upfront, but want to keep the liquid cash to use or invest in other ways.

“Weddings are a special and important occasion, but at the end of the day, it’s a party,” says Lapin, who also hosts a financial advice podcast, “Money Rehab with Nicole Lapin.”

“I don’t like spending too much money on a party,” she adds.

Maroo works like this: When a couple hires a provider in their network, that provider can bill through the platform. The couple then has the option to split the total cost of the bill over three, six or 12 months. Users can also opt for a more traditional plan and pay a 50% deposit upfront, with the balance being paid a second installment just before the wedding day.

Before setting up any payment plans, Maroo runs a so-called Credit test “soft pull”, a review that is less invasive and does not affect credit scores, to determine if the user can pay the bill in full within the agreed time. If a couple doesn’t have a credit check, they have two options: renegotiate with a provider to reduce bill costs, or add contributors like family members to the payment plan. (Credit checks are also performed on contributors.)

Once the payment plan is approved, the supplier will be paid in full by Maroo through an interest-free loan guaranteed through Sivo, a lending platform. That loan is paid off by the couple in installments, without interest. There is no additional interest if the user defaults on the debt, but unpaid bills may be sent to the debt collector, which can negatively affect the credit score.

Aside from the monthly payments, there are no fees to sign up or use Maroo. Providers in their network pay a fee of up to 10 percent of the total cost of the bill if it is included in the payment plan; The percentage charged depends on the length of the package. Payments made in Maroo are covered by a limit form wedding insurancewith additional coverage available for an additional fee.

Phillip Van Nostrand, a New York City-based photographer who uses Maroo, says the ability to offer clients an installment option benefits his business because “money matters” are often the most frustrating component when negotiating a contract. When customers have more payment options, it can reduce friction in the sales process. In that respect, “it’s a win for all of us,” he said.

In January, wedding website Carats & Cake launched its own website installment program. Now moving to pay for locations, it gives users the option to split the bill into four payments.

Instead of using loans from a third-party lender, Carats & Cake, which raised $29.9 million from investors to develop financial products, paying in full for the supplier; couples using its packages will basically return Carats & Cake. Jess Levin Conroy, CEO and founder of the site, says this approach allows for more control over the process.

A soft-drawn credit check is required to initiate the payment plan and installments are paid through the interest-free service. If a couple fails to pay, they will be subject to any penalties outlined in their contract with a venue. Levin Conroy said participating suppliers will charge a transaction fee, which averages 4.75% of the total cost of the invoice.

Ellen Christie, sales manager for Pippin Hill Farms and Vineyards in North Garden, Va., signed up for Carats & Cake as a beta user in the summer of 2021. Since then, She said the program was particularly effective at reducing delays in receiving payments.

“Nearly all of our deposits are paid early or on time, which is not always the case before,” says Christie. “It reduces the work of kicking people down. That metric is very important to us.”

Before their wedding last October in New York’s Hudson Valley, Rebecca Bell, 40, and Patrick Bell, 35, of Queens, signed up for Maroo when they realized that the majority of their suppliers they want the final payment one month before the event.

Although the couple had a budget from the start, Ms Bell, a director of photography, said it would be “overwhelming” to pay everything at once. She and Mr. Bell, who work at a social media company, wanted some breathing room for unexpected fees that might arise, and decided to adopt a payment plan.

With only two installments left, Ms. Bell said, “We’re going to have our wedding all upfront, interest-free, before our one-year anniversary.”

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