A company that lends its customers money to go on holiday has raised £35 million in investment. Could Fly Now Pay Later be an ideal way for young people to fund post-Covid getaways? Sam Ballard reports
Travel start-up Fly Now Pay Later is offering budget-conscious travellers the opportunity to pay for their holiday in installments, even after they’ve returned home. It could particularly appeal to cash-strapped Gen Z (read Globetrender’s Gen Z Horizons report to learn more) and is similar to Swedish post-purchase payments platform Klarna, for online shopping.
Fly Now Pay Later, a credit intermediary, works with about 250 travel companies including Emirates, Expedia and Booking.com. Users of the service can borrow up to £3,000 and stagger repayments for the cost of their trip over a period of up to 12 months. Interest rates vary between 0 and 40 per cent.
On its website the company uses this example: borrowing £600 over nine months, a one off transaction fee of 14.99 per cent is payable (fixed), you will repay nine monthly payments of £66.66 per month. Total amount payable £689.94. Representative 49 per cent APR.
The company, which was co-founded by Jasper Dykes, raised £35 million in May and is looking to expand into Germany before the end of June followed by a move into France.
Dykes says: “Few industries have been affected as significantly as tourism in the wake of Covid-19. Many companies have been affected and we are not different.
“This investment is a welcome boost to the sector, and provides us with adequate cash flow to help steer us through these challenging times.
“It’s predicted that once lockdown restrictions begin to ease, airlines will need to recoup costs – leading to unavoidable price rises in the future.
“There are tens of thousands of people who have families around the world who need a frictionless way to finance their flights. Likewise, for many businesses to operate internationally, flying is an essential requirement for employees.
“Fly Now Pay Later offers travellers a flexible and affordable way to pay for travel. By removing financial boundaries, we hope to open the post-Covid 19 world for travellers and reconnect people with their friends and families around the globe.”
In Globetrender’s recent Travel in the Age of Covid-19 report, one of the key trends it identified was Dream Trip Planning, something particularly pertinent to potential customers of Fly Now Pay Later.
“Next year and 2022 will be the years for dream trips (for those who can afford them), reflecting huge pent-up demand for travel after drawn-out restrictions on freedom. Living through a pandemic has sparked a re-evaluation of people’s priorities and attitudes. For many of those confined to their homes during lockdown, it has been a time to make plans.
“Needless to say, the crisis has been a stark reminder not to take travel for granted. Just as consumers are turning away from fast fashion, tomorrow’s travellers will invest their budget in less frequent, experience-rich, low impact trips that align with their values.”