UK neobank Monzo is planning to launch its own buy now, pay later (BNPL) product.
Monzo is set to join companies in both banking and BNPL including Revolut, Square and Klarna.
Insider Intelligence publishes hundreds of research reports, charts, and forecasts on the Banking industry. Learn more about becoming a client.

Monzo is planning to launch its own buy now, pay later (BNPL) product and could unveil it soon, per the Evening Standard. BNPL is a credit card alternative that lets customers make installment payments for their purchases.

Monzo bank account holders will reach 5.8 million this year.

The UK neobank’s version will be differentiated from the growing number of players in the space by offering affordability checks for users and reporting repayment histories to credit-checking agencies.

Monzo is set to join a slew of companies that are in both banking and BNPL, including:

Revolut: The fellow UK neobank’s CEO, Nikolay Storonsky, disclosed the company’s BNPL plans in an Evening Standard interview just four days before the publication reported on Monzo’s plans.
Square: The US-based fintech and business neobank said in August 2021 that it’s seeking to acquire Australian BNPL company Afterpay in a deal worth around $29 billion.
Goldman Sachs: The banking giant is teaming up with Apple on an upcoming BNPL offering internally called Apple Pay Later.
Klarna: The Swedish BNPL company has savings accounts in its product mix in its home market and Germany.

If Monzo can roll out a BNPL arm that garners a good reputation, it could build loyalty among its large customer base, which stood at 5 million as of its most recent annual report.

  House OKs $1 billion for Israel's Iron Dome defense system

Cross-promotion among existing customers can help the neobank quickly build a following for the product.

This can strengthen engagement and attract customers to spend more time in its ecosystem.
It may also appeal more to prospective users seeking to build or repair their credit because Monzo reports repayment histories to credit bureaus.

Data suggests that Monzo has a market opening, per findings from a 2020 Capco survey:

46% of UK BNPL users said it’s their preferred form of credit.
45% said they would like BNPL to be integrated into their current account-akin to a US checking account-or their credit card.

The neobank’s affordability and credit reporting-particularly, its affordability oversight for borrowers-may also enhance the reputation of its BNPL arm. Of late, the product type has been raising concerns that it could stick borrowers with too much debt.

Want to read more stories like this one? Here’s how you can gain access:

Join other Insider Intelligence clients who receive Banking forecasts, briefings, charts, and research reports to their inboxes each day. >> Become a Client

Explore related topics more in depth. >> Browse Our Coverage

Current subscribers can access the entire Insider Intelligence content archive here.

Read the original article on Business Insider

…read more

Source:: Business Insider

      

(Visited 1 times, 1 visits today)
News

Leave a Reply

Your email address will not be published. Required fields are marked *