Flex expands app to cover mortgages & household bills

Flex has expanded its app beyond rent payments to include mortgages, car costs, broadband, insurance and utilities, broadening its reach across a wider range of household bills.

Customers can now use the app to see, split and pay several recurring essentials in one place. The service is available immediately and is designed to address the mismatch between bill due dates and when many consumers are paid.

The expansion comes as household finances remain under strain in the United States. The Federal Reserve's latest household survey found that 16% of adults did not pay all their bills in the previous month, while 23% of renters had fallen behind on rent during the past year, compared with 17% in 2021.

Housing and transport costs account for a large share of consumer spending. Flex cited rent or mortgage, utilities, car payments and insurance as representing roughly half of US consumer spending, or more than USD $5.3 trillion a year.

Until now, Flex has been best known for rent payments. Its platform now handles more than USD $2 billion in payments each month, has served more than 3.5 million customers and has processed more than USD $45 billion in payments to date.

Flex also said customers avoid more than USD $39 million in late fees each month through the service, and more than USD $780 million in total so far. Earlier figures provided alongside the announcement had put the monthly late-fee figure at more than USD $30 million.

Pricing model

Customers are shown a personalised total before they commit to a payment. Pricing includes a USD $5.99 monthly membership fee, a 0.5% processing fee on bills paid through the app and, for customers who split a payment, a fee of up to 3% of the amount advanced by Flex.

Flex said it does not charge late fees or penalties, and balances do not revolve or compound. Rent reporting is also included, which the company said can help users build credit history.

The broader pitch is that a single payment platform could also benefit billers by improving payment consistency. Flex said receiving payments in full and on time could reduce collection work and improve customer relationships for landlords and other billers.

Chief Executive's view

In outlining the rationale for the broader push, Flex pointed to what it sees as a gap in consumer fintech around large, recurring bills.

"A decade of fintech innovation has transformed almost every part of money management, but it has largely ignored the bills that take up the largest share of household budgets, leaving them fragmented and difficult to manage," said Shragie Lichtenstein, chief executive officer of Flex.

"Rent is where we started, but our vision was always bigger: to build the payment layer for life's financial obligations and put households back in control of their cash flow," Lichtenstein said.

Funding and regulation

Flex said its growth is backed by more than USD $1.5 billion in committed secured borrowing capacity. It also said that, if its bank charter application is approved, it would be able to issue its credit products directly and expand access to its payment products through an FDIC-insured institution.

The company describes itself as a financial technology business rather than a bank. Banking services, lending, loan disbursements and payment transmissions are provided through Lead Bank or Column.

The latest move places Flex in a part of the fintech market focused on household budgeting pressure rather than discretionary spending. By concentrating on recurring essentials such as housing, transport, utilities and communications, the company is seeking a larger role in day-to-day bill management as consumers look for ways to smooth cash flow.

The service now allows customers to manage broadband, car, insurance, mortgage, rent and utility payments in one app.