Monzo is Joining the Buy Now, Pay Later Industry with New Product 'Flex'

Editor's note: this article was written in 2021, when Monzo launched Flex. Check Monzo's website for current Flex limits and terms.

Monzo confirmed that they will be entering the buy now, pay later (BNPL) industry with their new product named 'Flex'. They will be offering customers a credit limit of up to £3,000.

The BNPL industry is a growing industry in the UK with the main players in this sector being the likes of Klarna, Clearpay and Laybuy. BNPL allows customers to be able to purchase items from online shops without the need to have the full amount at the checkout. Customers are able to either pay in three instalments every 30 days from the date of purchase or pay the amount in full 30 days after the purchase. These BNPL services let allow their customers to make these purchases fee and interest-free, unless payments are made late. If a late payment is made, some providers impose late fees.

According to statistics from Statista, BNPL services are most popular amongst millennials, with 54% saying that they used buy now, pay later services in 2020. This is closely followed by Gen Z, with 50% also saying that they used BNPL services. Buy now, pay later is growing in popularity as the industry is seeing annual growth of around 39%. According to Finder, 9.5 million people in the UK state that they avoid retailers who don't offer BNPL services as a payment option at the checkout.

BNPL was heavily criticised for years because it wasn't regulated, and a review of the industry found 'potential for harm'. That changed on 15 July 2026, when the FCA started regulating buy now, pay later (deferred payment credit). Lenders must now check you can afford the repayments, and you can complain to the Financial Ombudsman Service if something goes wrong. Agreements taken out before 15 July 2026 are still unregulated.

Monzo Flex will allow customers to be used in person and online for purchases over £30, and be able to make repayments in three instalments, much like Klarna. Their slogan for this payment term is 'Pay in three for free', similar to Klarna and Paypal's slogan 'Pay in three'. Monzo Flex will also offer its customers the ability to be able to make repayments over 6 and 12 instalments, with an interest rate of 19% APR.

Monzo has said that an affordability check will be run and consumers will be able to make use of up to £3,000 of pre-approved credit. Customers will be able to pay off extra amounts or early with no additional costs. There are also no late payment fees, like Klarna. PayPal also announced in 2021 that it would scrap its late payment fees from 1 October 2021. Monzo Flex also allows customers to be able to use Flex on an existing purchase that has been made within the last 14 days.

To find out more about Monzo Flex, visit here.

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