Affirm embeds with Apple Pay for instore financing

Source: Affirm

Affirm, Inc., the company started by entrepreneur Max Levchin to provide fair and honest financial products, today announced Affirm will partner with merchants to make Affirm financing available in-store.

Now shoppers can use Affirm InStore in brick-and-mortar locations, securing credit in just seconds before they even get to the cash register, and can pay for their purchase over time in simple, fixed monthly installments. Additionally, the company announced that consumers will have the ability to instantly add a newly issued Affirm virtual card to Apple Pay, the easy, secure and private way to pay, via the Affirm mobile app.

Affirm’s expanded offerings are the next step in the company’s mission to provide honest financial products that improve lives. The relationship between retail and payments has evolved rapidly in recent years, driven by advancements in customer-centric, mobile-first technology that has fundamentally changed the way consumers interact with retail brands.

Recently, 75 percent of consumers said they expect a retail experience to be consistent whether they are on a company’s website, social media channel, mobile site, or in a store. This new omnichannel ecosystem has presented a fresh set of challenges for retailers as they compete for customer loyalty, including presenting consistent and transparent financing options at all points of sale.

“People’s shopping habits are evolving very quickly, beyond simply moving online-to-offline or offline-to-online when engaging with merchants,” said Rob Pfeifer, Chief Retail Officer at Affirm. “Consumers are on their phones, online, and in-store throughout a shopping experience. Affirm provides a solution for this omnichannel experience in the form of transparent and honest finance.”

Merchants can bring Affirm to consumers wherever they shop

Affirm InStore brings the same easy experience shoppers and retailers have come to expect online to the point-of-sale in brick-and-mortar locations. Affirm gives merchants two flexible options: they can integrate the Affirm InStore API (application programming interface) with their Point Of Sale (POS) system or use Affirm’s expanded virtual card experience.

Regardless of the in-store integration method, the experience for consumers is virtually identical to the online and mobile product experience they’ve come to love. To apply, shoppers complete a simple, five-field application for a real-time credit decision. Once approved, the consumer enters the amount they wish to spend and selects a payment plan—usually 3, 6, 12, 18 or 24 months. Affirm pays the merchant in full at the time of settlement and takes on all fraud risk for the purchase.

Affirm app users can now automatically add their new issued virtual card to Apple Pay, and immediately use it to make a purchase anywhere Apple Pay is accepted.

Security and privacy are at the core of Apple Pay. When customers use a card with Apple Pay, the actual card numbers are not stored on the device, nor on Apple servers. Instead, a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on their device. Each transaction is authorized with a one-time unique dynamic security code.

Affirm InStore appeals to both consumers and retail staff, boosting sales

Simply Mac, a well-known Apple Premier Partner operating in the U.S., sells new and pre-owned Apple products and offers repairs by Apple-trained technicians as well as on-site device training. The company decided to switch from offering a traditional private label credit card (PLCC) to Affirm InStore in its brick-and-mortar locations, providing a seamless and transparent alternative to lengthy paper-based applications used by many PLCCs.

“It was a nightmare, and the lack of integration with our systems created a real potential for fraud,” said Tiffany Polmateer, Simply Mac’s director, purchasing and operations. Switching to Affirm “was kind of a no-brainer,” she added.

Since introducing Affirm into their physical stores, Simply Mac has seen a 20 percent increase in average order values above what they saw previously. They’ve also seen better customer engagement with 63 percent more applications and 34 percent more approvals per store.

“Affirm solved all of our headaches in one simple technology solution that was good for everybody,” Polmateer said, who noted that Affirm now also accounts for about 81 percent of Simply Mac’s online sales. “And, not just for us on the backend, but most importantly for the customers, too.”

Honest finance provides an alternative to credit that benefits merchants and consumers

The announcement comes at a time when consumers are becoming increasingly wary of accumulating credit card debt and are often skeptical of traditional store-branded or private label credit cards that offer “too-good-to-be-true” financing options such as introductory 0% APR teaser rates. According to a survey conducted by Affirm, this can impact a retailer’s brand even if the financing product is offered by a third party. Fifty-five percent of respondents said they would think less favorably of a brand that offers a financial product that can be harmful to consumers.

Affirm’s platform makes it possible for shoppers to pay for purchases over multiple-month terms with simple interest loans that don’t charge compounding interest or late fees. And, unlike most credit lenders that base loan decisions on a consumer’s credit score and income alone, Affirm takes a more sophisticated approach, using data science in credit-scoring algorithms that combine credit history and other relevant factors to assess creditworthiness.

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