Monzo Adds Virtual Card For Flex

Monzo has added a new feature to its Flex buy now, pay later product, which allows customers to pay for items in-store and spread the cost automatically.

Customers can now get a virtual card just for Flex payments which can be added to Apple Pay and Google Pay. It means that customers don’t need to edit previous payments to make them flexible but can instead automatically pay for them and spread the cost.

The card can also be used for online payments. Once the customer uses the card, customers can open the Monzo app to choose how many installments they want to pay over, and then Monzo will take the first payment immediately.

The new feature is in direct response to feedback from early adopters of Monzo Flex.

How Flex Works

Flex was first introduced in September 2021 and is designed to make it easier for Monzo customers to spread the cost of their purchases.

Customers apply through their Monzo app for Flex and will be given an instant decision based on their credit rating. If successful, each customer is then given a credit limit that is based on their credit score and income.

Flex can then be used for almost any purchase over £30, including everyday purchases made in stores where finance normally wouldn’t be available. Customers choose to flex their payment either over three months at zero interest, or over 6 or 12 months at 19% APR variable.

Customers can also amend their payment plans over time. If they get paid extra and want to pay more of the debt off to reduce the amount of interest, they can make an overpayment. And if money is tighter, customers can instead extend the payment plan to one of the longer options with just a tap.

Interest rates on each payment are shown in pounds and pence once calculated so that customers can easily understand just how much they’re going to be paying back, and there are no late fees if payments are missed.

Customers can also ‘Flex later’ and turn any eligible payment from the last two weeks into a Flex payment and spread the cost. When they do this, the customer will be refunded the amount they paid, minus the equivalent of the first installment.

The addition of the new virtual card means that customers are able to complete flex payments in-store easier, rather than having to use the option to ‘Flex later’ and edit the payment once it has been taken. This also allows customers to use their Flex balance immediately if their current account balance is too low to make the full payment.

The Rise Of BNPL

This new feature comes as BNPL payments are growing in popularity. One of the largest providers of BNPL, Klarna, has reported a huge surge in demand for its services after expanding availability in both the UK and US.

Earlier this year, the UK government announced its plan to introduce stricter controls on the BNPL market, with the concern that younger people could fall into severe debt problems if left to over-extend themselves through BNPL plans.