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Monzo's 'Flex' card helps it build 20% stake in Buy Now Pay Later market, research finds


Monzo’s ‘Flex’ card has helped the London fintech build a 20% stake in the UK’s Buy Now, Pay Later market, new research has found.

The credit card, which allows customers to spread the cost of purchases over three months interest-free, has transformed the firm into a major provider of BNPL credit since the launch of the card in late 2021, going from almost zero to 20% of the market in one year, according to an analysis by credit technology company Render.

At the time of its launch, Monzo said it released Flex because “there are already a few ways to spread the cost of purchases over time. But customers told us none of them quite hit the mark.”


When users sign up for Flex, Monzo carries out an affordability check, which typically involves a soft credit search. Based on affordability assessments the fintech will then offer customers a credit limit of up to £3,000.

But the study by Render also found that across the BNPL sector, transactions do not routinely appear on credit histories, despite being a form of debt. Of the more than 7,500 customers whose anonymised data was analysed between 2022 and 2023 – and who were known to be using BNPL – over half (51%) did not have it on their credit reports.

The Render Report also found that the average transaction count had gone up for all age groups, suggesting that BNPL is being used to fund more, smaller purchases and routine expenses rather than large single-ticket items.

Gerald Chappell, CEO and Co-Founder of Render, said: “Lenders who do not use Open Banking data are tossing the coin on whether the indebtedness of their customers is accurate, which could lead to debt accumulation.

“We hope by sharing these insights we encourage a debate about what the future of responsible lending should look like.”

A Monzo spokesperson said: “Monzo Flex is a fully regulated credit card product. All customers using Monzo Flex undergo full credit and affordability checks, which are reported to credit providers, and are given a credit limit to use rather than undergoing checks on individual payments.

“Monzo Flex gives customers complete visibility and flexibility over all repayments and we don’t charge late or hidden fees.”

BNPL or deferred payment credit products have surged in popularity since the start of the pandemic, with as many as 14 million adults using the products in 2023, according to estimates by the Financial Conduct Authority. Usage was higher for 25-34 year olds and renters.

The FCA research also found that regular BNPL users were over four times as likely to have missed a payment of a bill or credit commitment in three of the last six months, and almost twice as likely to have increased the amount of debt on credit products over the last year.

Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said: “When used appropriately, the product provides valuable benefits, but we want to ensure that consumers, particularly those in vulnerable circumstances, have adequate protections and are given sufficient information.”