I hate the whole mentality of BNPL, it’s predatory for those who cannot manage their finances and can easily lead them into lots of financial difficulty.
Whilst it works well for some people, much like credit cards, Monzo should be encouraging healthy financial behaviour imo.
They are a bank, that’s not going to make them a lot of money
I’ll be interested to see Monzo’s offering here - UX could really set them apart. Done well, the Merchant wouldn’t even need to support Monzo specifically, you just have a credit pot that a transaction can be assigned to.
However, with Monzo’s focus on profitability, I suspect 0% offers are out, so maybe the likes of Klarna still have an edge.
It’s not all impatient people wanting things unnecessarily right now.
Our washing machine broke last year.
It was the end of the month so I was naturally skint but I could have stretched and struggled through the following month if I needed to while wiping out my £100 emergency pot.
Why though? I was offered 3 months interest free (and a washing machine is pretty important) so I chose the option that didn’t stretch my finances. I didn’t even need 3 months in the end, I managed to do it in half the time by sticking it in a Monzo pot and paying from there 
Mortgages would
Mortgages lead to financial difficulty and people losing their homes.
Are you not against that?
Generally BNPL makes its money from retailers. The model is, it encourages people to spend more and therefore retailers pay the BNPL company to offer the loans to customers. That’s why it’s ‘supported’ by specific merchants.
They do sort of differ from credit cards here, where 0% credit cards make their money by encouraging people to rack up a spend and then hoping they won’t be able to pay it off before the interest kicks in.
If Monzo built it into a credit pot then yes they’d need to charge interest.
There’s no chance I’d ever used BNPL if it didn’t come up as 0% APR, PayPal credit is great for that as most my purchases are generally either 4 or 6 months interest free. Gives me time to pay off the full amount before any interest kicks in.
Have to see how this pans out with Monzo, the criteria for loans and an overdraft seemingly jump at a spin of the roulette wheel. If Monzo have an APR above 0% I’d be steering well clear.
Large, secured debt is something Monzo needs to offer eventually I think, but right now it doesn’t have the finances to start that.
Monzo does have a broad reach and a market though. It’s well established that people in general will pay more for borrowing to do it through their own bank than through another source (otherwise Monzo loans probably wouldn’t have gotten off the ground either)
To be fair I think Klarnas model is mainly that though. Emergency broken washing machine purchases aren’t the main use of the platform.
How does it lead to financial difficulty when strict review processes can be implemented which evaluates customers likelihood to default on their mortgage payments?
People who have been renting for years are accustomed to budgeting enough to make their rental payments would be able to make mortgage payments especially when you consider a lot of the time mortgage repayments are cheaper per month than rent.
It’s a bit different compared to BNPL where you’re reassuring your customers that it’s fine to have debt and have your finances be in negative… not a great healthy way to approach finances imo.
If that truly worked, nobody would have their home repossessed.
I know they are totally different, I was pointing out your contradiction that Monzo shouldn’t do one thing but instead should do another, that also hurts people.
You not remember the cause of '08 crash? Subprime mortgages lent out by greedy banks.
If banks do their job the likelihood of the home being repossessed is reduced massively.
Of course some peoples circumstances change such as freak injuries happening but these are covered by the insurance you take out when getting a mortgage no?
I don’t actually think mortgages do sit in the same area as BNPL. They aren’t short term credit products designed to influence consumer behaviour. I don’t get the comparison really.
It’s a terrible comparison
I know they aren’t the same. He just contradicts himself massively.
One post is
“Monzo shouldn’t do BNPL because it makes people buy more trainers than they need”
Then
“But they should do mortgages and people borrow hundreds of thousands and then can’t afford to pay it and end up homeless”
And then gets worse by making it just about 2008, like that’s the only time people have had their home repossessed.
I don’t think that’s a contradiction at all though because the two things are so different,
Again BNPL is a short term product designed to influence purchasing behaviour. I think it’s perfectly consistent to be against that while not being against mortgages
I’d say “like any startup that is not making a net profit”
But as I can see through the news, it is always about the bad news.
The report has many good news for those who want to see them succeed 
Can either of them lead to financial difficulty? They are still forms of credit.
I’m leaving it there as neither of you can seem to see it 