Max Levchin’s fintech giant Affirm has launched its services in the U.K., building on its existing operations in the U.S. and Canada.
The Nasdaq-listed firm offers credit to consumers so they can split the cost of a purchase into multiple payments, while promising not to charge any late fees.
Late fees were imposed on nearly a quarter of the shoppers who opted for buy now, pay later plans in the U.K. in 2023, according to the Centre for Financial Capability. The industry has been under mounting scrutiny, with the government announcing last month that it was working on new regulations aimed at protecting consumers.
Affirm will initially offer interest-free and interest-bearing monthly payment options to shoppers in the U.K., but the interest charges won’t increase or compound over time, so consumers will always know what they owe upfront.
Affirm said that it underwrites every transaction before making a real-time credit decision and it only approves consumers following an assessment that verifies their ability to pay.
Levchin, the billionaire cofounder and CEO of the firm, said: “Affirm was founded on the premise of putting people first and empowering consumers to take greater control over their finances. Building on our leadership in the U.S. and Canada, where we partner with top retailers and commerce platforms, we see a significant opportunity to extend our mission of building honest financial products to the U.K.”
Affirm had more than 18.7 million active customers in North America who transacted over $26.6 billion in gross merchandise volume last year. Its merchant partners include the likes of Amazon, Shopify and Walmart.
Affirm’s revenues jumped 46% to nearly $2.3 billion in the year through June 2024, and its net loss narrowed to $518 million. Levchin said in a filing in late August that the company had set a goal of hitting operating profitability on a GAAP basis by the fiscal fourth quarter of 2025.
Levchin cofounded Affirm in 2012 with Palantir Technologies cofounder Nathan Gettings, serial entrepreneur Jeff Kaditz and Alex Rampell, a general partner at Andreessen Horowitz.
When the San Francisco-based company listed on Nasdaq in January 2021, the stock doubled, bringing its market cap to $24 billion. Since then, Affirm’s share slide has pushed its value down to $13.5 billion.
Levchin was previously a cofounder of PayPal, along with Peter Thiel, Elon Musk and others. His other ventures include Yelp, where he served as chairman until 2015; Slide, a social gaming company acquired by Google for $182 million in 2010; and Glow, a fertility-tracking app.