Affirm is expanding its ‘Buy Now, Pay Later’ service to the UK

LONDON — Buy ​​now, pay later To confirm launched its installment loans in Britain on Monday, in the company’s first expansion abroad.

Founded in 2012, Affirm is an American fintech company that offers flexible payment options. The company says it underwrites each individual transaction before making a credit decision and does not charge late fees.

Affirm, which is authorized by the Financial Conduct Authority, said its UK offering will include interest-free and interest-bearing monthly payment options. The interest on the plans will be fixed and calculated on the original principal amount, meaning it will not increase or compound.

The company’s expansion into Britain marks the first time it has launched in a market outside the US and Canada. Worldwide, Affirm has more than 50 million users and more than 300,000 active sellers, including Amazon, Shopify And Walmart.

Among the first merchants to offer Affirm as a payment method in Britain are flight booking website Alternative Airlines and payment processing company Fexco. Affirm said it expects to onboard more brands in the coming months.

Affirm CEO Max Levchin told CNBC that the company had been working on the UK launch for more than a year. The reason Affirm chose Britain as its first overseas expansion target, according to Levchin, was because the country saw high demand from merchants in the country.

“It’s a huge market, it’s English-speaking,” making it a great fit for the company, Levchin said in an interview last week ahead of Affirm’s U.K. launch. Affirm will eventually expand into other markets that are not English-speaking, but this will take more work, he added.

“There are a lot of competitors here who are serving the market in a sensible way. But when we started doing outreach to vendors, to find out locally, is the market saturated? Does everyone feel well served?” Levchin said. “We got such a huge amount of market traction. It sealed the deal for us.”

Competition in financial technology in Britain is fierce. In the buy now, pay later segment that Affirm is targeting, the company will find no shortage of competition in the form of major players like Klarna, Block Clearpay, Zilch and PayPalwhich entered the BNPL market in 2020.

Where Affirm differs from some of these players, according to Levchin, is that its financing product offering gives customers the ability to pay off purchases over much longer periods of time. For example, Affirm offers payment programs that last as long as 36 months.

Affirm’s launch in Britain comes as the government consults on plans to regulate the ‘buy now, pay later’ industry.

Among the key measures the government is considering are plans to require BNPL providers to provide clear information to consumers, ensure people don’t pay more than they can afford, and give customers rights if problems arise .

“In general, we welcome regulation that is thoughtful, that pushes the work to the market to do the right thing, but also knows how not to be too burdensome for the end customer,” Levchin said.

“It’s great to tell us that we have to do a lot of work in the background before you lend money. We’re very good at automating. We’re very good at writing software. We’re going to do the work,” he added . “It is dangerous to put the responsibility on the consumer.”

Confirm the clearance received from the Financial Conduct Authority, the country’s financial services watchdog, after months of discussions with the regulator, Levchin said. He added that the company’s “impeccable reputation” helped.

“We’ve never charged a cent in late fees. We don’t do deferred interest. We don’t do the anti-consumer stuff that people struggle with,” Levchin told CNBC. “So we have a good, untarnished reputation for being very thoughtfully pro-consumer. And merchants love that.”