The UK fintech is rolling out its BNPL service Monzo Flex, which lets users spread payments over a period of time.
UK digital bank Monzo is jumping into 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 interest-free. It also offers a six-month and 12-month option at a 19pc interest rate.
Users can buy anything using the feature as long as the transaction is more than £30 and less than £3,000. Excluded transactions include cash withdrawals, gambling and crypto.
It has been expected that both Monzo and Revolut, the other big digital bank based in the UK, would jump on the BNPL bandwagon. This is a growing fintech space that is becoming more competitive.
UK data estimated that there was £2.7bn in BNPL transactions in 2020, with 5m people using these services since the beginning of the pandemic.
Last week, PayPal acquired Japanese BNPL service Paidy, while PayPal rival Square snapped up Australian BNPL service Afterpay for $29bn last month. Sweden’s Klarna has been making waves in BNPL and became Europe’s most valuable start-up earlier this year.
This week, US investment banking giant Goldman Sachs also threw its hat into the ring by picking up BNPL service GreenSky for €2.24bn.
“If you’re eligible, we’ll give you a pre-approved credit limit you only apply for once. So no checks at check out,” wrote Monzo’s Leanne Kelsall in a company blog post. “And you can flex as many payments as you like, as long as the total spend is within your limit – giving you confidence that you’ll never overspend.”
She said that users can choose to pay back the due amount early at no extra cost, and there are no extra charges for late payments.
“Apply once, up front. If we approve you, you can use Flex as often as you like, as long as you have enough available credit. So you know you’re good to go before you get to the checkout.”
Early access to Monzo Flex is now being given to new and existing users.
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