We greatly respect the Consumer Financial Protection Bureau’s efforts to protect and support consumers, and we’re pleased that the Bureau is promoting consistent industry standards (many of which already reflect how Affirm operates). Now, all participants will have to follow these. Since our founding over a decade ago, Affirm’s mission has always been to build honest financial products that improve lives. Credit cards’ days are numbered as people no longer have to tolerate the ball and chain that comes with revolving credit card debt. A majority of U.S. households revolve on a credit card, carrying a balance from month to month and compounding interest into principal. With Affirm, there is no ability to “revolve” by design. We don’t ever charge late fees and we have zero business benefit to extending access to credit that is not repaid. We also provide consistent and transparent info at checkout (including TIL disclosures), and offer dispute and error resolution assistance. We still have a long way to go to achieve our mission but having increased clarity and a level playing field across the industry is good for consumers, good for merchants, and good for Affirm. The CFPB should absolutely hold the industry to account for living up to our promise of providing a more flexible and consumer-centric alternative vs. repackaging the same old gotchas from credit cards in shinier wrappers!
We are encouraged that the Consumer Financial Protection Bureau is promoting consistent industry standards, many of which already reflect how Affirm operates. Affirm’s success is aligned with responsibly extending access to credit as we do not charge late or hidden fees. We underwrite every transaction, provide consistent and transparent disclosures, and offer dispute and error resolution assistance. We have long been a vocal supporter of efforts that promote greater choice and transparency for consumers. Thoughtful regulation that provides a level playing field can help bring more flexible and transparent payment options further into the mainstream and is a positive for consumers, merchants, and Affirm. More info here: https://bit.ly/3V04Dfc Our practices here: https://bit.ly/3J43flN
This reminds me of GM publicly celebrating new emissions standards while simultaneously lobbying against them in Congress. BNPL companies' revenue models depend on getting consumers to feel that they are spending less than they are in the moment. As a result, BNPL users tend to add more to their carts and finalize their purchases more often. BNPL also has all kinds of negative downstream impacts on consumers' budgets, including more frequent overdrafts and late payments. Companies like Affirm and Klarna are collecting fees from merchants on larger order volumes while consumers overspend and suffer, just like with credit cards. Talk about repackaging gotchas.
Brian Hughes
3mo
I couldn’t agree more. It’s great to see the playing field being leveled out to favor companies like Affirm who are committed to doing the right thing for their customers.
Love seeing Affirm lead the way in ethical finance. 💪 It's about time the whole industry gets held to the same high standards. Down with debt traps! Up with transparency and fair play!
"Credit cards’ days are numbered"?? Until you can pay me 1.5% to 5% for a purchase, it's far from numbered. Sure, paying 0% for a year or two on larger purchases is nice. However, I don't see it replacing day to day purchases for a VERY long time (if ever).
It's great to see Affirm supporting the CFPB's push for consistent industry standards. Transparency and consumer protection are so important.
Good for consumers. We need protection.
Rhonda Campbell
3mo
Must be smart with buy now, pay later contracts. Pay those off as soon as possible to avoid penalties and fees. Sometimes what taste sweet upfront has a very bitter taste at the end.
Bob Ketterer
3mo
My new credit card is free interest for a year and like BNPL the bank would like me to run up a balance and pay 20-25% interest for years into the future.
For decades, people with less financial literacy/education have become trapped by credit card companies seeking to prey on them like wolves. Kudos to you Max and Affirm for changing the game. It's well overdue.
Retired. Reading, musing, writing and resting.
3moNot to be picky, but aren't all loans "pay later"???