Mihuru.com review: book flight ticket now, pay later!

I saw Mihuru's ad on facebook and spent some time understanding their model. Mihuru allows you to book your flight ticket by paying only a portion of the amount and pay the balance before travel date. This is useful if you don't have all the cash upfront but don't want to pay interest on loan.

What is the savings advertised by Mihuru? How can I save with Mihuru?

• Assume a flight ticket from Chennai to Dubai, for a travel date 1 month from now costs INR 15000
• If you had the entire amount, you can pay now and book..
• But what if you don't have 15000 right now. If you wait for 2 weeks till you have 15000, ticket price might have gone up to 18000. That is 3000 extra. Now you've to may 3000 more. 
• With Mihuru, you can book when it was at 15000, by paying only say 5000 or 6000 + a one time service charge and pay the balance within next 1 month. Thus you don't have to pay the extra 3000 just because you didn't have enough cash. Assume you've paid a service charge of 300 for Mihuru, you still save a net 2700. 

Note that this is hypothetical- while ticket prices generally increase closer to travel date, the % of variation depends on lots of factors- sometimes savings will be more, sometimes less or none. You've to take that gamble. If you feel price will definitely increase, you desperately want to travel but don't have enough cash right now (but sure of being able to pay within next few weeks) then you can try Mihuru and hope to save.

What if I have a credit card?
Credit card gets you upto 45 days depending on your date of transaction n billing cycle to pay. So for near term bookings credit card holders may not need Mihuru. But what if you're booking 4-6 months in advance? In such cases even credit card holders can try Mihuru if they can't pay entire amount within 45 days.

What happens if I book but don't pay the balance?

• You will lose the initial amount you have paid- Mihuru will probably use this amount to pay as cancellation fee to airline and limit their liability
• Paylater is a legally enforceable concept. So Mihuru can pursue the balance payment through various legal means
• Mihuru assigns a credit limit to you based on your financial strength- so if you don't have strong financials you will anyway not able to book expensive tickets- this reduces the risk for Mihuru

Some limitations to be kept in mind

• While booking will be done once you make initial payment, ticket will be issued only after full payment. This means you will not have ticket with you for visa processing, seat selection, web checkin or other needs
• Mihuru scheme is applicable only for flights originating in India
• Mihuru service can be availed only if your travel date is minimum 30 days away. Can't be used for immediate travel. This is obvious as there has to be some time for you to pay the balance.
• Mihuru is limiting their risk to maximum 50000 per passenger- this means you can't book a more expensive tickets- like tickets to Europe, US and such long haul flights easily cost more than 50000
• Mihuru will need access to your bank account- they would review how much balance you have, how much is your regular credits (like salary) and assign a credit limit to you. Depending on your bank balance your credit limit could be as low as 5-10k or maximum 50000 (I think it could be higher- one should be able to book multiple tickets- say for family)
• Note that any change/cancellation will incur Airline fee + Booking agent fee + Mihuru service charge- this will be an extra expenditure compared to booking directly on airline website.
• I am not sure if Mihuru can be used to book ultra low fare no-cancel, no-refund tickets- for example, I book AirAsia sale tickets years in advance and face a risk of losing 100% if I can't travel. I don't think I can offload that risk to Mihuru- they will recover entire amount from me if I don't pay the balance.

How does Mihuru make money?

Mihuru Terms of Service says users will have to pay a one time service charge. The exact amount is not known, but probably a few hundred per ticket. This forms their main source of revenue on each transactions.

Some additional possibilities are
-May be ticket price/convenience fee will be slightly more than what it costs to book directly with airline or other travel websites with offers (Example Easemytrip doesn't charge convenience fee, which is about Rs 400 savings per ticket or cleartrip regularly runs promo that can save a few hundred rupees per ticket). I couldn't check for myself as Mihuru account creation needs me to reveal my bank account details which I didn't want to. Those expecting to save a few thousand may not notice or don't mind paying a hundred or two extra
- May be a small commission from airlines?
- They are well funded- may be they are not focusing on profit right now- once they have enough users and transactions they can bargain with airlines or offer premium services etc to make more money

About Mihuru
Mihuru is a Mumbai based startup, who got some USD 150k seed funding recently. I think the idea is great- an untapped market- enabling more people to travel/save while traveling. I wish them all the best. Will be interesting to see how positively traveling public adapt this concept.

Another company worth checking out is AlpFly- they take a lump-sum amount upfront and promise say 10 tickets at a fixed price. But there're lots of hidden terms and conditions- do check my review here