BNPL’s are all the rage. Just ask Monzo, who are another lender capitalising on their rise. Having unveiled a new BNPL product with a £3000 limit, they join a market that is dominated by companies like Paypal and Klarna.
The digital bank will still need to carry out affordability checks before lending and must treat customers fairly, in line with the FCA’s recent regulatory changes surrounding BNPL’s announced earlier this year.
Despite this, the appeal of short-term financing has attracted controversy, with many young people in particular accruing significant debt. It will be interesting to see how Monzo navigates these waters, particularly with its handling of customers that are identified as potentially vulnerable. Research earlier this year from Citizens Advice showed that over the last 12 months, the number of adults who have used BNPL’s has risen to include 37% of disabled people and 45% of people with mental health issues.