What Affirm’s IPO and Chase’s new installment product say about the BNPL market
- Affirm files to go public and Chase unveils BNPL feature My Chase Plan.
- As the pandemic rages on, BNPL products remain more relevant than ever.
Digital commerce platform Affirm filed to go public last week. The startup founded by PayPal founder Max Levchin provides retail customers with installment based loans and is a major competitor in the Buy Now, Pay Later market.
Affirm lets retail customers pay for their purchases using fixed payments, instead of deferred interest, hidden fees and penalties associated with credit cards. Merchants use Affirm to promote products, acquire new customers, increase revenue and glean insights on their consumers’ behaviors.
The startup’s IPO documents reveal a sizable company growing quickly and also stemming its losses. The company plans to go public amid a host of new and incumbent players investing heavily in the market.
Affirm now serves around 6.2 million people who have made approximately 17.3 million purchases. 6500 merchants like Neiman Marcus, David’s Bridal and Callaway Golf use Affirm to offer installment payments to their customers. Its lending capabilities aside, the platform is a major ecommerce ecosystem that grants retailers and consumers discovery access to connect and interact.
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As Affirm matures from an installment loan player to a full-blown ecommerce platform, customer metrics begin to matter more. Affirm outperformed its competitors in its measurement of customer loyalty with a 78 on its Net Promoter Score for the second half of the 2020 fiscal year. Since 2016, its dollar-based merchant retention rate remains above 100 percent across each merchant brand. 64 percent of Affirm loans during the fiscal year which ended on June 30, 2020 were taken out by repeat consumers.
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