So far, over 500,000 people have signed up with the fintech. However, the account is not actively used by all users.
(Photo: Vivid Money)
Frankfurt The Berlin neobank Vivid will offer its customers installment payments in the future. The company announced this on Thursday morning. “Our goal is to be able to offer our customers an app with all financial services over the next two years,” says Vivid co-founder Alexander Emeshev in an interview with Handelsblatt. Therefore, the launch of Vivid Now is now the “next logical step”.
Vivid offers customers the classic functions of a current account. You can also invest your money in stocks, funds or cryptocurrencies. According to the smartphone bank, it has over 500,000 customers, more than half of them in Germany. Your other three markets are France, Spain and Italy.
In the future, Vivid customers will now be able to choose from an additional range of products. Installment payments per Vivid Now is divided into three options: “Back-up”, “Auto Split” and “Free up”.
With the back-up function, an overdraft facility can be used, with the effective annual interest rate being twelve percent. With both “Auto Split” and “Free up” the amount is divided into three installments. In the case of timely repayment, the interest should be waived for both options.
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According to the company, however, before Vivid Now is activated for customers and they can use the installment payment, general information about the income situation and a Schufa query are carried out. Accordingly, the overdraft limit is set at a maximum of 5000 euros. “We only allow this offer to solvent customers that we have checked in detail beforehand. In this way, we also want to minimize the risk of a debt trap,” says product manager Charles Spencer.
Offer initially only one Germany
Initially, the company only offers installment payments to its customers in Germany. Another market is to be added this year.
Users pay a basic fee of 2.5 percent of the total amount, which applies to all payment options. Excluded are users of the premium offer of the smartphone bank.
Overall, the company expects only slight customer growth in the coming months. Emeshev explains that Vivid is currently closing “numerous inactive accounts” from customers who have not used the product offerings for months. The company wants to be operationally profitable by the end of next year. Since inactive customers burden the balance sheet.
Among the smartphone bank’s competitors, Emeshev counts neobanks such as N26 or Revolut from Great Britain, which already offer similar installment payment products – but also neobrokers such as Trade Republic. “The difference is: We want to offer everything in one app and not just a sub-area,” says the Vivid co-founder. In comparison, N26 does not offer trading in cryptocurrencies, while Trade Republic only specializes in this.
Since Vivid does not have its own banking license, the company works together with Solaris from Berlin – as does its previous competitor Nuri. However, the Berlin crypto bank had to file for bankruptcy on Tuesday because it could no longer receive fresh capital from investors.
Takeover options are being examined – No comment on Nuri
Vivid showed better timing. In February of this year, the Berliners completed a financing round of 100 million euros. According to their own statements, this increased their rating to 775 million euros. “We were very lucky when it came to the timing of the financing round,” says Emeschev in retrospect.
He now wants to use the capital buffer: According to its own statements, the smartphone bank is looking around for possible takeover options. “There’s a lot of that right now,” says the Vivid co-founder. Vivid did not want to comment on whether Nuri was also part of it when asked.
More: Credit, transfers, bitcoins – what customers need to know about Nuri’s bankruptcy