Buy now, pay later returns. However, it will likely be in a different form.
Companies that offer this service are expanding the concept into other areas, and one of the largest companies in this area, We confirmis among them.
Vishal Kapoor, Head of Product at Affirm. Image Credits: We confirm
In its case, Affirm approaches this with the Affirm Card, a debit card that gives consumers the flexibility to pay up front or request to pay over time through the Affirm app. Consumers request the payment plan for eligible purchases before checking out or can link their bank account to pay with the Affirm Card using the app. Where Affirm differs from BNPL cards issued by competitors, for example Klarna and Apple Pay, is that Affirm takes over transactions made using its debit card, according to Affirm’s head of product Vishal Kapoor.
Formerly known as Debit+, Affirm Card had over 500,000 active consumers as of October, with 3x more transactions per active user compared to Affirm overall, according to the company’s most recent quarterly earnings report.
TechCrunch spoke with Kapoor about the idea of putting buy now, pay later on a debit card and how it sets Affirm apart from the competition.
The following has been edited for clarity and length.
TechCrunch: How did the Affirm Card come about?
Vishal Kapoor: As with all great products, we started to see many of our consumers come to us and ask us this very important question: “We saw you at a certain retailer and used the product and loved it. It’s amazing and has helped us finance those things we wouldn’t have been able to buy, and that’s much better than other alternatives like credit cards because of fees and revolving debt. Where else can we use it?” This is a really good boost because any product is only as good as the involvement of both consumers and trading partners.
How did you know if the buy now pay later physical card transfer would work?
The short answer is that it works. We’re seeing very, very early signs that the product market is a match with our existing user base. Consumers ship it to their physical address and then use it in their daily lives. The proof is in the pudding in terms of when we see consumers using it, they’re actually using it more than buying now, paying later. It has all the power of Affirm, but 42% of all transactions are actually paid transactions. So it goes without saying that once you have something you love and trust, you’ll just use it as your primary payment method for everything from large, in-depth purchases to your everyday stuff.
What were some ways you wanted to differentiate yourself and this card from the competition?
The first is that we undertake every transaction. We have all the insurances and checks for our customers because we don’t charge late fees. We are able to offer this security that we will not allow this transaction to go through if we do not believe you can return it because our motivation is aligned with the consumer’s motivation.
Second, we can underwrite in real time and offer features that a credit card simply cannot. With a credit card, you apply once, get a credit limit, and keep using it. This is. The Affirm Card has additional things it can do: You can pay now, you can pay as you go, or you can schedule a purchase. For that last one, you can go into the app, create that pre-purchase, and then come in and use it as a paid functionality later. The beauty is that the two ways don’t just exist in isolation. You can actually go between them. This is the future.
Where are your consumers using Affirm?
Overall Confirm spending — we’re seeing healthy consumer spending on travel and tickets. We have recent partnerships with companies such as Cathay Pacific and Booking.com. We strengthen this relationship with both consumers and trading partners.
On the front of the card we see new and interesting behaviors. Eighty-five percent of commerce happens offline, in-store, so we’re seeing about 30% of all transactions in our cart happen offline, nine times more than traditional Affirm users.
We also see people using Affirm to pay for groceries, both paying now, and in some cases, paying later due to inflation.
What’s in the works Confirm?
We’ve talked a lot about consumer features and we’ll continue to innovate on the card and make sure consumers find good value in using the product and that Affirm is a trusted partner for their transactions.
We also have a very healthy merchant network where we innovate to ensure that merchant partners can easily integrate with AWS solutions, both at the point of sale and in other ways. Another is how you enter the Affirm ecosystem as a merchant and what happens once you do. For example, what kind of analytics you have available, how consumers are performing for your specific business, and how much you’ve increased your average order value. A value proposition we provide to marketers is to provide a 360-degree view of their business, how they can convert better and also how to run their business more efficiently.
