Affirm’s Innovative Approach to Buy Now, Pay Later: A Discussion with the Head of Product

Buy now, pay later is making a comeback, but it’s evolving into a different form.

Companies offering this service are expanding into other areas, and Affirm, one of the leading companies in this sector, is embracing this trend.

Vishal Kapoor, head of product at Affirm. Image Credits: Affirm

In the case of Affirm, the company has introduced the Affirm Card, a debit card that offers consumers the flexibility to pay upfront or request to pay over time through the Affirm app. The card allows consumers to request a payment plan for eligible purchases before checking out or link their bank account to pay with the Affirm Card using the app. What sets Affirm apart from its competitors, such as Klarna and Apple Pay, is that Affirm underwrites transactions made using its debit card, as explained by Vishal Kapoor, Affirm’s head of product.

Formerly known as Debit+, the Affirm Card had over 500,000 active consumers as of October, with 3x more transactions per active user compared to Affirm overall, according to the company’s latest quarterly earnings report.

TechCrunch spoke with Kapoor about the concept of integrating buy now, pay later into a debit card and how Affirm is distinguishing itself from competitors.

The following was edited for clarity and length.

TechCrunch: How did the Affirm Card come about?

Vishal Kapoor: The Affirm Card emerged in response to our consumers’ demand for more usability. They found our product to be exceptional and were eager to use it at more merchants, appreciating the financial benefits it offered compared to traditional credit cards. This demand from both consumers and merchant partners was a significant motivator for us.

How did you know if bringing buy now, pay later to a physical card would work?

We are already seeing promising signs of product market fit. Consumers are actively incorporating the Affirm Card into their daily routines, utilizing it beyond just buy now, pay later transactions. In fact, 42% of all transactions are paid off immediately, demonstrating that once consumers trust and appreciate a product, they are inclined to use it as their primary payment method for various purchases, both large and small.

What were some ways you wanted to differentiate itself and this card from competitors?

Affirm’s approach sets it apart in several ways. Firstly, every transaction is underwritten, ensuring consumer safety without imposing late fees. Additionally, the Affirm Card offers real-time underwriting and versatile payment options, such as paying now, paying as-you-go, or planning a purchase. These unique features distinguish it from traditional credit cards, providing consumers with flexibility and control over their payments.

Where are your consumers using Affirm?

Affirm is witnessing substantial consumer spending in travel and ticketing, with recent partnerships with companies like Cathay Pacific and Moreover, the Affirm Card is driving new consumer behaviors, with approximately 30% of all card transactions occurring in offline, in-store settings, demonstrating a significant shift from traditional Affirm usage patterns.

What’s in the pipeline for Affirm?

Affirm will continue to innovate and enhance consumer features, ensuring that the Affirm Card remains a valuable and trusted payment solution. Additionally, the company is focused on optimizing its merchant network by providing seamless integration with AWS solutions and delivering comprehensive analytics to empower merchants in improving their businesses.

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