The UK’s point-of-sale finance market is undergoing significant shifts as HSBC launches its BNPL solution, Flexipay, just months after fintech firm Divido, partly backed by HSBC, announced insolvency.
HSBC enters BNPL market
Divido, once a promising fintech in the embedded retail finance space, entered administration in July.
Founded in 2014, it offered a white-label consumer lending platform enabling financial institutions to provide instalment-based payment solutions.
Despite raising $45 million in funding, including a $30 million Series B round backed by HSBC, ING and American Express Ventures, Divido struggled to achieve profitability. Losses reportedly escalated from £343,673 in 2018 to £7.26 million in 2022.
HSBC Launches Flexipay
In contrast, HSBC UK is entering the BNPL space with the launch of Flexipay, a regulated point-of-sale financing product designed to meet the increasing demand for instalment-based payment solutions.
Flexipay allows consumers to split large purchases into manageable payments through a seamless application process at checkout.
HSBC’s first merchant partner is Ovo Energy, enabling customers to finance solar panel purchases. The bank plans to expand its merchant network throughout 2024.
Flexipay will be accessible to all UK consumers, regardless of their existing relationship with HSBC, reflecting the bank’s focus on inclusivity and responsible lending.
“Paying in instalments is increasingly popular and can be a great budgeting tool,” comments Andy Rankin, interim head of unsecured lending at HSBC UK.
“HSBC Flexipay offers customers a regulated payment alternative with the support of a trusted lender.”
Divido’s downfall highlights the volatile nature of the fintech sector, where high-growth aspirations often collide with profitability challenges.
As demand for BNPL solutions grows, competition from established financial institutions adds further pressure on start-ups.
As Divido exits the stage and HSBC makes its BNPL debut, the competitive landscape of point-of-sale financing continues to evolve.
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