Dive Brief:
- In time for the holiday shopping season, the buy now pay later provider Affirm has updated its mobile app with new features meant to drive growth for sellers, the company said Wednesday.
- The app now allows shoppers to view their estimated spending limit on the home screen, review and manage their payment plans in one spot, view credit offers from Affirm and open an Affirm Money Account.
- Half of the respondents to a recent Affirm survey said they consider 0% interest rate financing to be equally or more valuable than traditional discounts. More than half of respondents said they use buy now pay later services to afford their purchases (53%) and budget properly (52%), per its survey results.
Dive Insight:
Affirm has rolled out its new features just in time for the holiday shopping season, which has previously brought a boost in business for buy now, pay later companies. Last year, consumer spending through BNPL platforms rose 14.3% from the previous year to $75 billion, according to an Adobe Analytics report released earlier this year.
Given that 80% of active Affirm users download the app, the company updated the platform to improve the user experience for shoppers. With the holidays fast approaching, customers will seek out installment payments and zero-interest offers, so the company redesigned the app to make managing payments, finding credit offers and seeing their purchasing power easier, according to Vishal Kapoor, senior vice president of product at Affirm.
“Since testing and getting feedback from consumers on the new experience, we’ve seen more users engage with the app and use it to make purchases,” Kapoor said in a statement. “This underscores the value of personalization and a transparent approach that doesn’t penalize consumers when they’re late or hit them with unexpected fees.”
Affirm does not profit from its transaction data via advertising and marketing, Affirm CEO Max Levchin said during the Goldman Sachs Communacopia + Technology conference in September. Levchin said during the conference that the company earns money from individual transactions as well as interest charges of up to 36%.
Affirm’s internal research aligns with other reports indicating that consumers are turning to credit card alternatives to manage inflation. In response to a YouGov and Bankrate survey released in April, half of respondents said they used BNPL services to stretch their cash flow. Thirty-seven percent said they used BNPL providers to use low or no-interest-rate financing.