Max Levchin, co-founder of PayPal Inc. and CEO of Affirm, took center stage on the first day of Collision 2019 held at the Enercare Center in Toronto, Canada.
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London – buy now, pay later confirm Installment loans were launched in the UK on Monday, marking the company’s first overseas expansion.
Founded in 2012, Affirm is an American fintech company that offers flexible installment options. The company says it underwrites every deal before making a loan decision and doesn’t charge any late fees.
Affirm, which is authorized by the Financial Conduct Authority, said its products in the UK will include interest-free and interest-bearing monthly payment options. Interest on its plans will be fixed and calculated based on the original principal, meaning interest will not increase or compound.
The company’s expansion into the UK marks its first foray into markets outside of the US and Canada. Globally, Affirm has more than 50 million users and more than 300,000 active merchants, including Amazon, Shopping and Walmart.
The first merchants in the UK to offer Affirm as a payment method include flight booking site Alternative Airlines and payment processing company Fexco. Affirm said it expects to add more brands in the coming months.
Affirm CEO Max Levchin told CNBC that the company has been working on launching the product in the UK for more than a year. Levchin said Affirm chose the UK as its first overseas expansion target because it saw huge demand from merchants in the country.
Levchin said in an interview last week ahead of Affirm’s UK launch that “it’s a huge market and it’s English-speaking,” well suited to the business. Affirm will eventually expand to other non-English-speaking markets, but that will require more work, he added.
“There are a lot of competitors here, and they’re all serving the market wisely. But when we start doing merchant outreach, it’s just to see if the local market is saturated? Does everyone feel like they’re being well-served?” Levchin said. . “We’re getting so much traction. It’s a deal for us.”
Competition is fierce
Competition in the UK fintech sector is fierce. In the “buy now, pay later” segment that Affirm is focusing on, the company will find competition from large players like Klarna. Blocky Clearpay, Zilch and PayPalentering the BNPL market in 2020.
Levchin said Affirm differs from some of these players in that its array of financing products enable customers to pay off their purchases over a longer period of time. Affirm, for example, offers payment plans up to 36 months.
Affirm’s UK launch comes as the UK government consults on plans to regulate the buy now, pay later industry.
One of the key measures being considered by the government is plans to require BNPL providers to provide clear messaging to consumers, ensuring people don’t pay more than they can afford and giving customers rights if things go wrong.
“Generally speaking, we welcome thoughtful regulation that brings work to market to do the right thing, but also knows how to not cause too much trouble for the end customer,” Levchin said.
“It’s good to tell us before you borrow money that we do a lot of work in the background. We’re very good at automation. We’re very good at writing software. We’re going to do the work,” he added. “It’s dangerous to put the responsibility on consumers.”
Affirm has received authorization from the Financial Conduct Authority, the country’s financial services regulator, after months of discussions with regulators, Levchin said. He added that the company’s “good reputation” helped.
“We’ve never charged a penny in late fees. We don’t do late interest. We don’t do any of the anti-consumer practices that people struggle with,” Levchin told CNBC. “So we have a good, untarnished reputation because we support consumers very thoughtfully. Merchants love that.”
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