Monzo set to reveal buy-now-pay-later feature next week
According to reports, Monzo’s version of BNPL will include affordability checks on borrowers.
Digital bank Monzo is reportedly set to join the massive number of fintechs racing to offer their customers buy-now-pay-later (BNPL) services.
Unlike existing BNPL options, Monzo is said to be including full affordability checks for its borrowers and will be sharing data with credit bureaus.
Indeed, lending has been a sore subject for Monzo these last few years. In its latest results, Monzo’s overall lending actually fell from £143.9m to £104.6m as the bank looked to reduce its exposure during Covid-19.
The lack of lending has also dragged on Monzo’s hopes of profitability, with interest income falling from £25m to £23.9m last year.
BNPL could be a huge revenue driver for the bank, but only if it’s handled with care.
“Monzo has always been a customer-led bank and it needs to ensure it delivers [BNPL] in a way that helps customers, including vulnerable customers, to manage and improve their financial well being,” added Brear.
“While these moves are great for customers, they won’t hurt Monzo’s own finances either. I expect to see much happier shareholders and investors when the next set of results come around.”