
Levchin Launches New Payments Startup, Affirm - jamesjyu
http://allthingsd.com/20130226/exclusive-paypal-co-founder-levchin-launches-new-payments-startup-affirm/
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ig1
Most of the replies here are a great example of a filter bubble. Living in San
Francisco or New York you just assume everyone has a credit card.

Not so.

A quarter of US households are unbanked or underbanked and primarily rely upon
cash for payments.

That's why Walmart introduced shop online and pay in person. Only 15% of
Walmart's in-store customers pay via card, from surveys they found that two-
thirds of their online customers would prefer to pay in cash.

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hkmurakami
That's actually quite interesting. It reminds me that Japan as a whole has
very low credit card penetration as well, and the primary mode of transaction
is cash, even for items costing hundreds of dollars (or tens of thousands of
yen, to be precise). Use of 10,000 yen bills (~$100) is routine.

People still have latent mistrust for handing over credit card information
online. Virtually all courier services have a "pay upon arrival" option which
allows you to pay for the cost of the item + the shipping when you receive the
item. The courier then pays the retailer for the item cost.

edit: It may also have to do with the fact that the financial services
industry there is even more sales driven and more scammy than its U.S.
counterpart, and hence the public has a mistrust for all financial "products"
that are anything other than super conservative.

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kevin_rubyhouse
What sort of credit card penetration do other parts of the world such as
Western Europe/Eastern Europe/Middle East/SE Asian Countries/Australia...
other places.

Where do you get the information that you wrote about? I'd be very interested
to read into it further. Anybody know any relevant works off the top of your
head that you could share?

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hkmurakami
_Where do you get the information that you wrote about? I'd be very interested
to read into it further. Anybody know any relevant works off the top of your
head that you could share?_

Unfortunately this is from anecdotal experience. I was living and working in
Japan for some time so I saw first hand what services are offered and how
people behave.

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rdl
This looks interesting. I guess they're going through all of this trouble in
"digital credit checking" because they don't assume everyone has a credit
card?

There's probably a market for a very low friction payment system for high
margin goods (e.g. virtual goods, or subscriptions), similar to just doing net
terms, for individuals, online. Something where as long as you can guarantee
an individual only has one account, you're willing to extend a certain amount
of credit per user (not per transaction).

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mericsson
Even assuming everyone has a credit card, entering a credit card on a mobile
phone is enough friction to cause the potential consumer to postpone or never
make the purchase. It seems like Affirm would solve that problem.

~~~
rdl
I'd rather just put my amex into my iphone once (oh, wait, done already) and
let Apple handle it. It would probably work IFF Apple and Android/Google both
have a relatively compatible solution (from the merchant perspective).

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ceslami
What do you mean by "put my Amex into my phone once...and let apple handle
it"? Is this a component of Passbook or something?

~~~
rdl
I mean in iTunes, and just buy stuff via iTunes. There are obviously many
serious problems with that. (Apple's policies, 30% cut, etc.)

In practice what I do is just buy things from Amazon, whether it is on my
phone or laptop, so the critical thing is being logged in to amazon.com.

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kefs
<https://www.affirm.com/u/>

> Sign up with Facebook to buy online securely.

Really? The only signup option is via Facebook? Noooo thank you.

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EScott11
The entire point is that Affirm looks at data from your social network(s) to
establish an alternative metric for credibility.

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mamcx
I wish somebody "solve" the problem of payments for people NOT in USA. That is
something that seriously require solution.

~~~
niggler
This will eventually be solved by a bunch of people building solutions in
different countries and one firm sweeping through and buying up the startups

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brackin
Levchin has money in most of the major payments startups so it's interesting
to see him launch his own venture. I like the idea but the current site/demo
doesn't really feel like the right execution. I suppose I should get to know
it before making a decision.

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Cherian_Abraham
I have my reservations about the viability of a Klarna type approach in the US
- where there is a high level of credit card penetration among the US
customers. Since Affirm will require customers to choose that as a payment
option, over other funding sources - Paypal, CC and others, there has to be a
compelling reason for a customer to choose Affirm. And atleast in the US,
where we are card-entrenched, and everyday we make it easier for customers to
use their plastic - it's a tough value proposition for Affirm.

~~~
rohamg
Affirm saves the user from entering cc info on mobile - a pain for many
reasons. Just like PayPal on web.

~~~
Cherian_Abraham
Except that wasn't why Paypal became what it is today. The P2P aspect and
sufficiently protecting the customer during early days of e-commerce is why
Paypal became so big. Removing the need to enter the full credit card info -
was a nice to have - and secondary, once use of Paypal became more ubiquitous.

Infact, Affirm would have to hope that customers will use anything other than
credit cards to settle with Affirm - because it will be cost prohibitive for
them to do that. They would have to find ways to justify the customer settling
via ACH. Too little, too late imho.

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jusben1369
At Spreedly we support 45 + payment gateways and naturally one of those is
PayPal. One thing PayPal has pushed really hard in the last 12 months to us as
a "partner" is "BillmeLater" So I'm trying to work out what part this is about
ease of payment (feels like digital wallets will get there soon too) and how
much this is about the fact you don't have to pay for 30 days (PayPal seems
enthralled with it) Maybe it's both? Anyway there's always room for more
innovation.

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dm8
Promising. Entering credit card information is pain, particularly on touch
devices. Is Google Wallet their main competitor?

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sriramk
This is a very interesting take on what Klarna has done in Europe. Since there
is such high friction to completing a transaction on mobile (pulling out your
credit card number, entering it on a smartphone keyboard, etc), anything that
makes the checkout process easier is going to be very valuable.

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chetanahuja
Facebook as social proof (of creditworthiness !!) ? I somehow don't buy <no
pun> it.

~~~
rdl
I wouldn't be willing to delete my FB profile and start over for $50. If you
tie a purchase to that profile, so I might be able to scam you for $50 _once_
per "real" FB profile sometimes, that's acceptable. What's not acceptable is
letting a Russian organization scam you for N x $50 where N is as many random
email addresses as they can generate.

Similarly, I'm not going to throw away my iPhone for $50. If there were a way
to strongly tie an account to a physical iPhone, with no more than 1 account
per iPhone, that solves a lot of problems. Then your only problem is if I make
a piece of malware which goes to everyone else's iPhone, opens an account, and
then somehow sends me the benefits.

~~~
chetanahuja
_Then your only problem is if I make a piece of malware..._

Yes. Only the little problem of malware spread in the form of software on
eternally connected devices.

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nayefc
Credit cards, Square and now Affirm. Yet another way to spend all your money
without really keeping track of where it goes. :-)

But seriously, looks promising. Really hope someone would crack the mobile
payments market.

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par
looking forward to see how this pans out.

