There hasn’t been any new ideas here in a while, so let me throw one out there based on what’s been trending on the UK side- how about letting US users do the whole “pay in installments” thing as well? I’ve used Klarna a few times now and it’s a pretty slick experience, but there are some places it won’t work (in-store payment support is limited, you can’t create a card to pay with unless you open the website in their built-in browser making app-based payments a bit difficult), and, of course, it’s one more app to manage. I’d use my Monzo account and card more if it had that functionality available to me.
I’m a bit late to the party, but I think that’s a great and useful feature too! I use Klarna and Afterpay and I really think there’s untapped potential if Monzo did it in the US!
Agreed! We would love Monzo Flex in the US as well.
We’re super curious to hear what people’s thoughts are on existing Buy Now Pay Later services are - do you find them easy to use? What do you think we could do to make the experience better? etc.
I use Klarna and Zilch, and here’s my take so far:
First thing- both of them have a setup where they strongly prefer you search for a partnered store and make your purchases through their link. On second thought I can see why they do that (if they’re offering 0% interest installments when the cost of borrowing is above 0%, the money has to come from somewhere, and while merchant interchange is already 2-3%, more from an affiliate link doesn’t hurt either) but it definitely leaves something to be desired.
Klarna mostly lives up to its marketing tagline of “smooth”. It’s easy to sign up for, even people with very little or ugly-looking credit scores get a few hundred to start off with no hard pull on my credit report at all as long as I only use “pay in 4”. (That being said, Klarna makes it bit too easy- I didn’t find out until a few months in when they started declining purchases for “incorrect personal details” that I signed up with, and my application was approved, with the wrong date of birth) Having to separately add a debit/credit card as a payment method before making your first purchase is a bit of friction that I imagine wouldn’t be there with Monzo Flex (integration into the bank and all that).
One thing I like about Klarna is that they earn rewards. 2% back on the first $250 spend, then 1% back after, redeemable for gift cards for Starbucks, Amazon, and the like. I imagine this isn’t sustainable if the Flex card doesn’t count as a corporate card like Klarna’s one-time cards do, though.
Another thing I like is the one-time-card system. While for most stores I’m not too worried about it, it’s nice to be able to use a “disposable” card number at stores where I might worry more about data security.
Third positive is the two week grace period that just about every purchase has built in- if you need it, you can ask them once per purchase to extend the due date of your next payment by another two weeks without any penalty or additional interest. I imagine there are some purchases where this isn’t available but I haven’t bumped into one yet.
One positive of Klarna that I don’t think could happen in Monzo Flex due to the first vs third party nature is that after the first payment I can pay what I owe on Klarna from any credit/debit card from any country. This allows me to make payments from my Chinese bank account and card (some of my freelance work pays into that account). I don’t mind that it can’t happen on Monzo Flex, but I want to put it there as a reason I might not move all of my buy now pay later activity to Monzo Flex US when it happens.
The biggest deal for me that Monzo Flex can step in and fix is where it can be used.Klarna’s US product doesn’t work in most physical stores (they insist on having a separate agreement with each store or chain that wants to take Klarna), and even at the stores where it does work, there’s two different flows- generate a one time card, add one time card to Apple/Google Pay, then use at store, or generate QR code, then use at store. They do make it clear which one you use for the store you want to shop at, at the time you go into the app, but it does get a bit annoying. They also can’t be used for payments made outside the US. Having a permanent virtual card that can be used worldwide at any virtual store or physical store that takes contactless payments would be much appreciated.
Second biggest deal is, you have to make a decision at the time of purchase whether you want to “pay in 4” or all at once. This is one of the Flex features that makes me want it here. Being able to get indecisive and say “pay in full first” then if cashflow becomes an issue, to say “actually, let me Flex that” would definitely help.
Zilch is the other one I’ve been using.
Zilch is easier to make purchases with, in that there’s one virtual card, and after their most recent update you just tap “Zilch Anywhere” on the front page to activate that card while you’re making a purchase, and tap “done” when you’re done. That’s nice in terms of security, having one permanent card number but only having the card accept transactions when you tell it to.
Not so nice is that payments are hidden behind the menu button. Klarna shows you right on the front page how much credit you have available with them and how much you owe, and you tap your balance owing to go straight to the “payment” page.
One weird thing I don’t like much about it is that it treats payments made after 5PM the day of as “late” (the app prompts me to “make up” my “missed” payment), whereas with Klarna I can pay later at night without issue.
Also, Zilch doesn’t take foreign cards for payment. When (being optimistic here) Flex comes to the US, it would completely replace this for this reason- for me, it doesn’t do anything that Monzo Flex wouldn’t do.
Wow, that’s a wall of text.
Don’t forget the U.S get Apple’s BNPL, the UK doesn’t
Thanks for writing this all out - that’s really a great insight into things.
I think Monzo Flex’s killer feature (like you mention) is just the ease of using it anywhere without any hoops + the ability to do it after the fact. The ability to use a single card (physical/online/apple pay) that can switch between paying in full and BNPL is great.
I’ve seen Chase and AMEX (probably others) offer similar things - but their interface seems like it’s trying to hide the details from you vs being transparent like Monzo Flex.
I’ve re-posted your comment in our Slack so we can keep it all top of mind. We’re still in the exploration days of US Flex. Like @andrew_fishy mentioned, there is some differences in the market of BNPL in the US vs UK so we want to make sure we’re offering a US version of Flex that makes sense.