Major Monzo update issued over customer payments | Personal Finance | Finance
Digital bank Monzo has announced a fresh update for users of its Monzo Flex credit card. The Monzo Flex service allows customers to spread the cost of their purchases over time.
Shoppers can split eligible transactions into three interest-free monthly instalments, or divide them across six or 12 months with interest charges. Originally, users were required to pay the full sum when using their Monzo Flex credit card, before choosing to spread the cost through their banking app later.
The bank subsequently improved this feature in September 2024, allowing customers to divide payments directly whilst shopping online – and now, the digital lender has expanded this capability to in-store transactions as well.
If you miss a Monzo Flex payment, you’ll have a seven-day period to clear it via the app – after this timeframe, it could impact your credit score and you may be moved to an extended payment plan with interest charges, reports the Mirror.
When Monzo Flex was first expanded last year, general manager Kunal Malani said in a statement: “Our customers love using their Flex credit card with Apple Pay and we’re thrilled to be the first bank to bring this feature to Apple Pay users in the UK.
“Now our customers are able to choose their monthly payments-right at checkout with Apple Pay when using their Monzo Flex credit card. This brings an even more convenient experience for our customers when shopping online.”
The Financial Conduct Authority (FCA) has launched a consultation on buy now, pay later products due to concerns that some customers are accumulating unmanageable debt. The proposed changes will require providers of these services to ensure customers can afford repayments and offer help if they face financial difficulties.
In the event of any problems, borrowers will have the right to file complaints with the Financial Ombudsman Service. These regulations are expected to take effect when the FCA takes over supervision of buy now, pay later services in July 2026.
Companies will then have a six-month period from the implementation date to apply for full authorisation. Research by the FCA shows that one in five UK adults, roughly 10.9 million people, used buy now, pay later services at least once in the year leading up to May 2024, an increase from 17% in 2022.
As of May 2024, 2% of UK adults, equivalent to 1.1 million people, had outstanding unregulated buy now, pay later debts of £500 or more, while 11% of UK adults, approximately 5.3 million people, had outstanding debts of £50 or more.
