Affirm CEO: Our New Buy Now, Pay Later Card Is Really the ‘Anti-Credit Card'

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  • Affirm's new debit card offering is "sort of the anti-credit card," founder and CEO Max Levchin told CNBC on Friday.
  • "It does serve the same purpose: You get to pay for things right now or over time," Levchin said.
  • The company expects to make the debit card widely available later this year.

Affirm CEO Max Levchin on Friday touted the company's new physical debt card offering, telling CNBC he believes it will offer shoppers benefits similar to those of a credit card but with more upfront clarity.

"It should not be called a credit card, for sure, in part because it's sort of the anti-credit card. I don't mean to be provocative," Levchin said on "Closing Bell," criticizing what he sees as a lack of transparency around credit card interest payments and late fees.

"Literally every single one of these things is the exact opposite for Affirm's card," Levchin added. "You know exactly what you're going to pay. You know exactly what the schedule for payment is and there will be no late fees under any circumstances, so I think it's sort of the exact opposite in many ways. It does serve the same purpose: You get to pay for things right now or over time."

Affirm announced its debit card offering Thursday, and the company said it anticipates making the card widely available later in 2021. Affirm, which Levchin founded in 2012, provides what's known as "buy now, pay later" services. It partners with a range of merchants, such as Peloton, and offers customers point-of-sale loans that can be paid off in fixed monthly installments. Interest rates on the loans can vary between 0% and 30%, but Affirm does not charge compounding interest.

Affirm has typically been associated with online purchases. But Levchin told CNBC the company's debit card offering is a recognition of various consumer preferences and the role offline shopping continues to play.

"I do know that our user base, primarily millennials and Gen Zers, love their debit cards. They love to transact with them offline, and the purpose of this product was to bring 'buy now, pay later' functionality that they've really loved online — and really offline as well with us, but have never had in a card — to where they are."

"The debit card form factor is a metaphor for everyday spend. That's where we're trying to get to," added Levchin, a co-founder of PayPal and former chairman of Yelp's board.

According to a press release, users of the Affirm Card will be able to pay for a purchase in full from their bank account. Or, the release states, they can choose to pay in installments by using what the company calls its "unique post-purchase feature." Affirm says on its website that users will be able to manage the purchases through its mobile app.

Affirm went public in mid-January, gaining 98% on its first day to close at $97.24. The stock ended Friday's session below that level, at $93.06, putting the company's market cap at roughly $24 billion. Shares traded as high as $146.90 apiece earlier in February.

Before Affirm's first trade in January, Levchin told CNBC that its "goal is to be a viable alternative to credit cards."

Affirm, which ranked No. 23 on the 2020 CNBC Disruptor 50 list, was a beneficiary of the stay-at-home economy as more people shopped online and turned to its services. As the economic reopening broadens out and shoppers start spending in different ways, Levchin said, he believes Affirm's debit card positions it well to capitalize.

"There's going to be a lot of interesting challenges as the country reopens, but the dominant thread there is going to be reopening will create a lot more opportunity for this product, which we have proven is what our customer wants and needs," Levchin said.

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