Investors have different views on Affirm

With shares of Affirm shedding around 45% at the end of last week and extending a three-month decline that is now nearing 70%, it’s hard to pay attention to anything other than investors’ view on the beleaguered buyer. now pay later (BNPL ) provider.

And yet, away from Wall Street, San Francisco-based FinTech’s top consumers and traders seem to have nothing but praise for the company, its technology, as well as its products and prospects.

Simply put, it’s a story no one wants to hear right now, and also a story few dare to tell in the face of an epic sale that feels more like an exit sale – which clearly isn’t. the case of Affirm or BNPL – only a recalibration after a cautious earnings outlook.

Strip away the profits, losses, expectations and multiples that investors have applied to the shares of this rapidly growing company, and instead take a consumer and merchant view of Affirm, and you’re left with a markedly different perception.

Consumers want more BNPL, not less

There is no denying that the BNPL concept is becoming a more popular choice for consumers who prefer to have more options on how to pay for their purchases, and Affirm is one of many pure game providers who have benefited from this change, including Klarna, PayPal, Sezzle and Afterpay, Square’s recently closed successful $29 billion acquisition.

According to a January PYMNTS study, 50 million consumers have used BNPL in the past year. And they have several options that can be used online or in physical stores. The study found that Affirm is among the top four services, with 34% using it online and 30% taking advantage of it in-store.

“We did very well. Indeed, our active consumption growth has accelerated, growing by 150% to provide more than 11 million people with a smarter way to pay,” said Affirm Founder and CEO Max Levchin during the the company’s earnings call on Thursday, February 10.

In addition to more in-store opportunities for BNPL at checkout, PYMNTS research also points to another area of ​​future growth through the involvement of banks in offering payment plans.

According to the new PYMNTS study, Banking On Buy Now, Pay Later: Tempment Payments And FIs’ Untapped Opportunity, 70% of consumers said they would be willing to use these products from their own bank if they were available.

There are also favorable demographic factors for both the company and the sector that seem to have been overlooked amid the short-term sell-off.

Other PYMNTS data showed that coveted young consumers are particularly interested in the plans, with 11.5% of bridge millennials (those between 32 and 41) having used BNPL before, 38% or millennials who haven’t. not yet used installment plans said they were interested in using it if it was available in a digital wallet.

Add locations and merchants

Affirm has upgraded its product line to meet customer demand. In January, Affirm unveiled its awesome app, giving them the ability to access all of the company’s purchasing, payment and financial services from one place, while giving customers a simple overview of how much money they’re getting. they could spend, from their cash-back earnings, their savings and their arrears.

The app also allows users to browse exclusive offers from favorite stores and make purchases online or in-store via a single-use Affirm virtual card.

Meanwhile, Levchin said Affirm added 16,000 new merchants to its stable of locations in the last three months of last year, bringing its total merchant partner portfolio to nearly 170,000 for the year.

“Affirm is as much a secure and transparent pay-over-time option for the buyer as it is the ultimate marketing tool for the seller,” Levchin said after the company’s second-quarter earnings report.

“We help our partners drive meaningful incremental sales without the need for gimmicks or discounts,” he added, noting that the number of active merchants on our platform has greatly expanded the reach of company and multiplied by 20 compared to a year ago.

Amazon and others

In terms of its relationship with merchants, Affirm recently partnered with Verifone to offer customers the ability to use installment plans online and in-store while offering a range of payment options, including bi-weekly and monthly payments.

In August, Affirm and Amazon announced that the e-commerce giant was entering the BNPL space and had entered into an exclusive agreement to offer installment payments on purchases over $50 through January 2023.

Although the terms of the deal were not disclosed, access to Amazon’s unparalleled share of e-commerce is clearly a desirable account to gain, even if it is a reputable merchant for pressing suppliers, sellers and payment processors for better terms – and rightly so. , given its unique influence.

While analysts have focused on the impact of Amazon’s alleged tighter terms on Affirm’s margins and earnings, it’s safe to say that had it not struck a deal – or terminated to the existing one – one of BNPL’s main players would have rushed to fill the void. .

As all of this plays out in the market, one thing is clear; when it comes to Affirm, there is a stark disconnect between investor opinion and consumer and merchant experience.



On: Seventy percent of BNPL users say they would prefer to use the installment plans offered by their banks – if only they were made available. PYMNTS’ Banking On Buy Now, Pay Later: Installment Payments and the Untapped Opportunity of FIssurveyed over 2,200 US consumers to better understand how consumers view banks as BNPL providers in a sea of ​​BNPL pure-players.