HSBC sign on building
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HSBC has secured the debut partner for its HSBC Flexipay platform, the company’s answer to the rising popularity of buy now, pay later (BNPL).

The bank, one of the UK’s largest and historic retail banks, has partnered Flexipay with OVO, a green energy company. OVO’s customers will be able to use Flexipay to pay for products like solar panels and batteries at first, with plans for the platform to cover pumps and electric vehicle chargers later on.

HSBC believes it has found a gap in the market due to market research suggesting there is strong consumer interest in green energy products, but the costs of these products appears to be putting people off.

BNPL, meanwhile, has become increasingly popular over recent years, with rising costs-of-living across Europe likely driving engagement with the payment method. This has driven success for fintechs like Klarna, which has BNPL as a flagship offering, and now traditional banks like HSBC are looking to get in on the growing market.

“Paying in instalments is increasingly popular and can be a great budgeting tool, providing the certainty of fixed repayments and a set end date,” said Andy Rankin, Interim Head of Unsecured Lending at HSBC UK.

“We are excited to start our journey in Point of Sale finance, offering customers a payment alternative which is fully regulated. For consumers looking to make a large purchase, HSBC Flexipay will enable them to do so with support from a responsible lender they can trust.”

HSBC Flexipay is a new offering to the British market, which has proven particularly receptive to BNPL products. Estimates for May 2024, for example, put the total value of BNPL purchases at £1.22bn, around 15.4% of total online spend.

This backdrop has seen the UK government move to better regulate the sector, with HM Treasury charging the Financial Conduct Authority (FCA) with applying affordability rules to BNPL products. This was welcomed by the sector, as some stakeholders like the aforementioned Klarna have been calling for more regulation in line with growth for some time.

HSBC’s Rankin continued: “The next five to 10 years will see a significant acceleration in investment that supports net zero, including people who want to make their home more energy efficient.  

“That is why we are pleased to partner with OVO, offering their customers who are buying solar panels first access to HSBC FlexiPay.

“Moving into next year we will look to expand HSBC Flexipay further, providing those buying a wide range of products the opportunity to benefit from its flexibility.”