Seems like affirm is really taking off. I'm just not clear on how the checkout works, but seems like on most merchant sites, you either enter the pay by credit card or you pay by affirm. So essentially affirm cuts out the payment service providers. Is that right? Thata a big problem for stripe and PayPal no?
Affirm is more like an alternate payment method. You would not have 100% customer base using affirm. Stripe / Paypal still adds value by having all payment methods (including BNPL & local payment methods) integrated in their solution, which would easier for merchants to use.
Why would merchant want to pay stripe or PayPalayPal in addition to paying for affirm? They can just give 2 options, either use affirm or klarna or stripe with all the credit cards.
Merchant would only really pay affirm or stripe if the user used that option. MDR aka merchant discount rate is not usually charged for just integrating. Thats why some checkout panels have what seems like 50 payment options
So if I’m reading this correctly - and pardon my crude outsider verbiage - if you look at payment types at the checkout level across merchants, you could say that BNPLs (and other APMs) are eating into the share of checkouts vs stripe/Adyen etc. As in, consumers are increasingly using BNPLs at checkout vs a credit card. But, BNPLs ultimately have to use a payment platform like Stripe, so this “loss in share” ends up being potentially negated?
I think affirm will create their own apis and would prefer you integrate outside of stripe. Which is why stripe had a partnership with klarna. Ultimately what would the merchant pay stripe when affirm which is also a tech company offer their own integration stack.
I wonder why stripe did not build a bnpl system of their own. Instead of building merchant lending which any bank already does.
Perhaps an acquisition is in order? There’s lots of BNPLs out there and at least from a consumer perspective I’m not seeing much differentiation in product offering, it’s seemingly more about availability at the merchant level (ie can I checkout using Klarna, etc). I’d speculate that BNPLs are engaged in a price war and land grab that doesn’t yield much in terms of profitability (very hard to raise take rates).
Affirm has a card. It's a very sticky service, who wants to create multiple accounts to manage debt. Similar to PayPal.
Did all my Thanksgiving shopping using Affirm. Quite a great experience. Some of them 0apr for 6 months. I'd rather rotate the money than to pay off monthly credit card
At least now people understand why affirm is going to be a big player in the payment system.