Monzo offers a new ‘buy now, pay later’ feature for all purchases
The UK fintech is rolling out its BNPL service, Monzo Flex, which allows users to spread payments over a period of time.
UK digital bank Monzo is entering the ‘buy now, pay later’ (BNPL) market with its latest feature, Monzo Flex.
Monzo Flex allows users to spread the cost of their purchases over three months without interest. It also offers a six month and 12 month option at an interest rate of 19pc.
Users can buy anything using the feature as long as the transaction is over £ 30 and less than £ 3000. Excluded transactions include cash withdrawals, gambling, and cryptography.
The announcement comes at a time when Monzo and Revolut, the other major UK-based digital bank, was expected jump on the BNPL train following the PayPal, Square and Klarna early risers.
Last week PayPal acquired the Japanese service BNPL Paidy, heating up competition in the Asia-Pacific market. Rival PayPal Square also acquired Australia’s BNPL Afterpay service for $ 29 billion last month, while Swedish BNPL giant Klarna became Europe’s most valuable startup earlier this year.
On Wednesday, the US investment bank giant Goldman Sachs also expressed its interest in the increasingly competitive market by seizing the BNPL GreenSky service for 2.24 billion euros.
The BNPL market had a good year 2020, with official data estimating transactions at £ 2.7 billion with 5 million people using its services since the start of the pandemic.
“If you qualify, we’ll give you a pre-approved credit limit that you only request once. So no checks up front, ”wrote Leanne Kelsall in a company blog post. “And you can adjust as many payments as you want, as long as the total spend is within your limit, giving you the confidence that you’ll never overspend. “
She said that users can choose to prepay the amount owed at no additional cost, and that there are no additional charges for late payments.
“Apply once, ahead of time. If we approve you, you can use Flex as often as you like, as long as you have enough credit available. So you know you’re good to go before you get to the cash register.
Monzo Flex is offering early access to new and existing users starting today (September 17) via an invitation during registration. Yesterday fintech announced another feature, Salary Sorter, which gives users the ability to automatically distribute incoming payments to different pockets – with the remaining balance to be spent.
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