Affirm wants to go beyond the simple loan to provide financial advice
LAGUNA BEACH, Calif. — Online financial services firm Affirm Inc. wants to go beyond just lending to providing financial advice to clients, its founder and chief executive said Wednesday.
“Trust me to give you the sound [financial] tips, ”Max Levchin said at the Wall Street Journal’s WSJ D.Live tech conference in Laguna Beach. “This is where we are heading next.”
Today, Affirm’s core business is working with online retailers to provide financing options to customers at checkout. Some partners include a furniture retailer
Peloton Interactive Inc. exercise bike company and travel website
Mr. Levchin declined to comment on talks his company has had to offer installment loans to clients of
Wal-Mart Stores Inc.,
which was first reported by the Wall Street Journal in August.
The additional services Affird wants to provide would be to help some consumers “get over that bump” of too much debt.
“Here’s a button we’re going to power up that you can use to pay off your debt, to lower your interest payments,” he said, hinting at a possible service.
Mr. Levchin, who first hit hard as one of the founders of the payment company
Affirm said has loaned more than $ 1 billion to date, making average loans of around $ 1,000 each. She made her millionth loan earlier this year.
Mr. Levchin criticized the financial sector, in particular the “misalignment” of incentives between traditional banks and borrowers. Highlighting the high profit margins on late fees, Levchin argued that some banks were most successful when borrowers did not repay their loans on time.
Affirm has tried to move beyond traditional methods of taking out loans like credit scores, for example, by asking borrowers to allow them to view their personal financial accounts to see their income. Some borrowers are “misjudged” by their FICO scores and unable to get loans that they otherwise should, Mr. Levchin said.
When asked what his FICO score was, Mr. Levchin replied that his credit score was 763.
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8