Affirm Financing Now Used at Over 1,000 Retailers

Max Levchin Launches Honest Finance Campaign at Company's First AFFIRMation Conference

AFFIRMATION CONFERENCE, SAN FRANCISCO – July 20, 2017 – Affirm, Inc., the company started by Max Levchin to offer fair and honest financial products, today announced it now processes simple-interest installment loans for consumers at over 1,000 internet retailers.

The new milestone, announced at Affirm's first annual AFFIRMation Conference for retail partners, comes just three months after Affirm announced the 1 millionth consumer installment loan processed through the company and made by its bank partner, Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC.

The achievement also coincides with the launch of Affirm's Honest Finance campaign. Levchin kicked off the initiative today with a call to retailers across the country to abandon predatory consumer credit practices, and a challenge to the nation's financial institutions to do the same.

"Affirm is reinventing consumer credit,"" said Levchin. "We've created a simple way to offer honest consumer financing that is fully aligned with the best interests of consumers. We are now challenging the industry to join us in putting people over profit. Every American, rich or poor, deserves to be treated equitably and honestly in every aspect of their lives—including their finances."

Four Principles of Honest Finance

Affirm's Honest Finance campaign is built on four fundamental values:

  1. Fairness – Don't charge deferred or compounding interest
    Deferred and compounding interest cause consumers to pay more than expected while giving lenders an incentive to keep them in debt. That's why Affirm charges simple interest only and gives users a fixed price up front that never changes.
  2. Access – Invest in serving more people
    It would be easier to rely on FICO scores for underwriting and to settle for turning away a high proportion of creditworthy borrowers. Instead, Affirm heavily invests in proprietary underwriting technology that makes it possible to give more consumers access to credit. Affirm also invests in serving its customers wherever they are, whether that's on mobile or desktop, online or in store.
  3. Simplicity – Make services easy to understand and use
    No one wants to read page after page of fine print, so it's no surprise that consumers are often deceived by the hidden fees and unclear costs that are frequently buried there. Affirm cuts out all unnecessary complexity and presents all the relevant terms and costs upfront in a simple and easy-to-digest format, with nothing to hide—so consumers know precisely what they'll pay and when.
  4. Helpfulness – Help customers act responsibly
    Lenders usually make more money when their customers make mistakes or run into trouble with their payments. But Affirm helps customers stay on track with AutoPay and friendly payment reminders while helping them build their credit history. Affirm also takes pride in its underwriting model's ability to predict people's ability and intent to repay. Affirm won't lend to anyone it doesn't think can pay back their loan on time and because Affirm doesn't have compounding interest or fees, it isn't incentivized to do otherwise.

Why We Need Honest Financing Today

Brands are becoming increasingly transparent with consumers because consumers are insisting on it. Somehow, this trend has escaped consumer financing—until now. That's because credit cards, once seen as an indispensable part of everyone's wallet, have become overly confusing and complex, leading many consumers to spiral into debt.

Some store-branded cards are magnifying the problem by offering deceiving introductory promotions that aren't upfront about the total costs. By taking advantage of these customers who don't fully understand the terms of these credit cards, retailers are generating a lucrative profit stream at a time when many are losing sales to online competitors.

These types of practices are exactly what Affirm's Honest Finance campaign stands against. And it's why a recent survey conducted by Affirm and Qualtrics of more than 1,000 22 to 44-year-olds in the U.S. found that 60% are worried about falling into debt. Much of this fear is tied to the inherent uncertainty that comes with the compounding interest of credit cards—29% said they're afraid that they'll end up owing more than they can afford.

63% of Millennials—who will account for a third of retail spending by 2020—are so put off by this uncertainty that they don't even own a credit card. 20% of Americans are also credit unscorable due to a lack of owning a credit card or an insufficient credit history. So it's not surprising that 87% of those surveyed by Affirm expressed the desire to pay for purchases over time that is not a credit card.

"Devious credit practices are ultimately in no one's best interest," said Levchin. "They hurt consumers financially, and while they can artificially boost profits, at the end of the day they damage a retailer's' brand."

Why Honest Financing Matters to Retailers

Retailers that offer an honest financing alternative at the point-of-sale will not only attract those customers resistant to or underserved by traditional credit, but will also create more valuable and long-lasting relationships with those customers.

"Almost immediately we did a very nice amount of business through Affirm," said Osher Karnowsky, General Manager at Jomashop. "We were a bit surprised, honestly. They told us what to expect. But we didn't really think people would adopt it quite so quickly."

Nearly 90% of consumers say that they feel more positively about a brand that offers Honest Financing. For retailers that translates into average order values increasing by 75% and conversion rate lifts by as much as 20%. They can also expect revenue per visitor increasing by more than 10%.

Most striking is that because of consumers' enthusiasm for Honest Financing—as evidenced by Affirm's 82+ NPS score—25% return to buy again. And all with little risk to retailers because Affirm pays them in full at the time of settlement, and takes full responsibility for fraud and loan defaults.

"Put simply, we're thrilled with the response to Affirm," said Justen Burdette, Head of Product and Strategy at Ting. "Everything we've heard from our customers has been positive—and like us, they feel like Affirm's simplicity and customer-friendly approach is almost too good to be true."

About Affirm

Affirm was founded with a goal to create honest financial products and services that empower consumers and improve lives. Our goal is to revolutionize the banking industry to be more accountable and accessible to consumers. Today, Affirm provides shoppers an alternative to traditional credit cards at the point of sale, giving them the flexibility to buy now and make simple monthly payments for their purchases. Unlike payment options that have compounding interest and unexpected costs, Affirm shows customers upfront exactly what they’ll pay each month — with no hidden fees and no surprises. Affirm partners with over 1,200 merchants, including travel retailers like Expedia, Orbitz, CheapAir and Suiteness, giving shoppers the option to pay with Affirm at checkout.

Media contact

Lisa Tarter
(415) 203-2462