Affirm launches new features to help consumers
“The more I looked at the retail sponsored financings, the more I realized that people ended up paying excruciatingly more than they bargained for… It’s not only morally outrageous, but it’s bad for business. “ – Max Levchin, Founder and CEO, To affirm
When Pay Pal Co-founder Max Levchin started Affirm in 2012 with one specific disruptive goal in mind: retail sponsored funding. Consumers, he noted, have spent decades accepting “free” or “interest-free” financing offers from retailers, only to find out the hard way that these offers were anything but true.
For consumers who make the slightest mistake, free access quickly becomes expensive. Suddenly the 0% APR drops to 29%, with penalties and additional fees compounded until the day of purchase. If this error occurs in the 70th month of a 72 month loan, it can be a very costly mistake.
Affirm’s flagship product – a transparency-focused point-of-sale (POS) installment loan solution – was created to tackle this problem.
“We always want to guarantee the ability to pay. If that person can’t afford it, we won’t lend. The idea of spreading the risk among the borrowers, we see it as detrimental in the long term to the economy, ”said Levchin mentionned. “But I think we can increase retail acceptance 10 to 30 percent just by being smarter and using better data.”
Affirm never lends to consumers who can’t repay, and those who are approved receive a loan term and monthly payment schedule with no late fees or hidden interest charges. From the start of their Affirm loan experience, consumers know exactly how much and over what period of time they will be paying off that debt.
It is a very successful product, Affirm Product Manager, Jack Chou told Karen Webster – with such success, he said, that Affirm has realized over the past year that there is much more it can do for consumers on their retail journeys .
“The one thing we constantly hear from customers,” Chou said, “is that their confidence in our brand went beyond the one loan they got once.”
To address this need, Affirm is launching a refreshed branding and new consumer portal that Chou says will help consumers spend responsibly – and identify merchants who, by accepting Affirm, have demonstrated their commitment to helping consumers. to do it.
The new Affirm brand
As with most Mark refreshes, there’s a new logo – one that’s quite different from what came before. This new visual style comes with a host of new product features.
The Affirm app and website now contains a Retail Discovery Tool to help consumers find retailers who accept Affirm, as well as those who have created unique offers for Affirm customers that are individually tailored to suit their needs. specific buying habits of a customer. According to Chou, integrating merchant-supported offers into the Affirm app is a natural expansion in a retail environment, where merchants have products they want to sell and customers who want to buy them don’t have them. funds available to purchase them at that time. of discovery.
“We see our role as ensuring that this purchase is done in a way that is both fair and transparent for both parties,” Chou explained.
In the Consumer Portal, a customer can see how well they have been qualified in total and to which merchants the funds have been allocated. Chou said giving this total view helps consumers track spending and come up with products to buy that are within their budget. Knowing what deals they are getting and that they are qualified to buy those items helps consumers control their spending, while also making them more confident.
Additionally, Chou added that if consumers understand what they can spend, they are less likely to overspend. With a median purchase price of $ 750, this is especially important for Affirm customers and for retailers who wish to serve them. This is where Affirm “excels,” Chou said: helping consumers make purchases “considered purchases”, so that it is easier for customers to bridge the mental gap between “I would really like to buy”. have this product ”and“ I would really like to have this product and I feel confident to buy it. “
The most wonderful (and expensive) time of the year
Affirm’s new brand arrives at consumers’ doorsteps before holiday season – the most wonderful and most expensive time of the year for most.
Chou told Webster that as the 2017 vacation approached, less than a quarter of Americans had a set vacation spending budget, 40% said they spent more than expected, and 50% said they took on debt. credit card accordingly. In the end, he said, many consumers bought regrets and even negative feelings about using credit cards. Almost 70% said last year’s debt made them nervous about spending this year.
It’s a nervousness that is probably justified, given the ease of use of credit cards and for consumers in the holiday frenzy to know how much they’ve spent. Until, of course, the credit card bill comes in. This moment of reality is one Affirm hopes to help consumers avoid, Chou noted, while still allowing them to make the purchases they want to make.
“I think we’re really excited with what we’re launching today – right down to the logo,” Chou said. “So many consumers feel that their spending can get out of hand and that their credit cards don’t help them feel more in control. And I think that’s where we can shine this shopping season and beyond. “