Neobanks go after Klarna: Monzo Flex Vs Curve Flex

Both Monzo and Curve launch launched their respective ‘buy now, pay later’ products…on the same day...and they are both called Flex.

For fintech banking challengers in 2021, launching a ‘buy now, pay later’ feature makes perfect sense. 

Demand for the BNPL is booming. The expectation that it could disrupt the credit card business, one of the most lucrative and competitive financial services markets in the world, looks more and more likely.

Yesterday, two of the best known UK players in the field Monzo and Curve did just that. And they called their hot new products by the same name: Flex.

Who was first? Was it a coincidence? And most importantly which one is better?

Technically speaking Monzo launched first, pipping Curve to the post by a few hours, but Monzo, at the time of going to press, didn’t comment on the naming blunder but in a tweet, the company said they had stealthily signalled the name on Monday.

Nathalie Oestmann, Curve’s COO says it was no more than a coincidence.

“Well, it’s a bit like spending months planning a killer outfit and then turning up to see someone wearing the same thing. But with a lower APR and the power to Flex a lot further back in time, we think we wear it best," she told AltFi.

So what’s the difference?

Eligible Monzo customers can pay for purchases over £30 in three instalments at 0 per cent interest or over six and 12 monthly instalments at 19 per cent APR (variable). Credit is limited to £3,000.

Curve meanwhile allows customers to be able to 'go back in time' and convert past payments from up to a year ago, into three, six, nine or 12-month instalment loans. It charges a flat rate APR of 13 per cent, however, meaning it is cheaper but offers no 0 per cent period. Monzo, therefore, is better over shorter periods up to three months.

Monzo offers a similar feature to Curve's go back in time feature albeit only up to two weeks after purchasing something.

Curve Flex has been in testing since September 2020 and says it had 1,600 beta users making c.7,000 transactions into instalment loans worth over £1m. 

Monzo’s Head of Borrowing, Kunal Malani, said: “We know that money stops working for people when debt piles up and becomes a trap - so we’ve listened to customers and designed a better way for them to pay later, which puts them in control. Flex combines Monzo’s technology and banking expertise with its core values, ensuring customers always have visibility and control over their financial lives and only borrow money that they can afford to repay.”

Curve’s founder and CEO, Shachar Bialick said: “Why settle for a rigid copy when you can have the real thing? Curve Flex is almost certainly the most flexible credit solution in the market. With no limitations on merchants and the ability to accommodate all Mastercard, Visa, and Discover cards, Curve Flex will provide customers with access to easy and affordable credit.”