So I’ve had this idea. Suppose that you’re generally pretty good with money. You stick to your budget month to month and you’ve got an emergency fund built up. But your boiler packs up, or something else happens that burns through whatever emergency fund you’ve got. What then? You could take out a payday loan, but that’s got risks and ridiculous fees attached to it. If it were me I’m actively trying to avoid using credit. What do you do?
What if Monzo warned you that an upcoming regular payment exceeds your account balance? And then - subject to similar credit checks to a full overdraft facility etc - allows you to defer making that payment out of your balance until your next payday? At which point Monzo deducts the money from your balance.
Similar principle to an overdraft - probably similar architecture as well. There could be a limit on the number or value of payments allowed to be deferred, and automatic repayment at the top of the next budget cycle. Something like a cross between an overdraft and a payday loan. Monzo customers don’t go into debt because of an emergency, Monzo charges a minor fee for the service so makes some money, the regular payees get the money they’re due. Everybody wins!
Could this work, or am I just nuts?