American fintech firm, Affirm, has recently announced its expansion into the UK market. The firm, co-founded by PayPal Inc. co-founder Max Levchin, and well-known for its innovative ‘buy now, pay later’ schemes, made its debut in the UK on Monday, marking its first venture abroad.
Established in 2012, Affirm has gained a solid reputation for its flexible payment options that enable customers to pay over time. The company prides itself on its comprehensive underwriting process which assesses each transaction individually before making a lending decision, and it does not charge late fees.
The Financial Conduct Authority has authorized Affirm’s UK offering, which will include both interest-free and interest-bearing monthly payment options with fixed interest calculated on the original principal amount.
This move to the UK is a significant milestone for Affirm as it is the first time they are venturing outside of the U.S. and Canada. Affirm’s global reach includes over 50 million users and more than 300,000 active merchants, such as Amazon, Shopify, and Walmart.
In the UK, some of the first merchants to offer Affirm as a payment method include Alternative Airlines, a flight booking website, and Fexco, a payments processing firm. Over the coming months, Affirm expects to onboard more brands.
According to Levchin, the decision to expand into the UK market was driven by high demand from merchants in the country. The CEO also highlighted that the UK’s English-speaking market makes it an ideal fit for business. Further non-English speaking market expansions are in the pipeline but will require more preparation.
Despite the fierce competition in the UK’s financial technology space, Affirm is confident in its unique offering. Levchin points out that Affirm’s financing products allow customers to pay off purchases over much longer periods compared to other players in the market.
The UK government is currently reviewing plans to regulate the ‘buy now, pay later’ industry. Levchin welcomes thoughtful regulation that does not overburden the consumer and is ready to comply with any requirements.
Affirm’s expansion into the UK comes after securing authorization from the Financial Conduct Authority following months of discussions. Levchin credits the firm’s “pristine reputation” for helping secure this authorization. He emphasizes Affirm’s customer-friendly approach and commitment to not charging late fees or deferred interest as key to their success.
