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Affirm’s CTO talks transparency and the tech that makes BNPL possible –

BNPL is not new idea; has now been released in recent years and has become very popular.

Buy now, pay later Let people do exactly what their name implies – buy and pay later. The difference between BNPL and credit cards is that instead of charging the full amount of the card purchase, customers can choose to pay for the item in installments.

However, there are some who argue that BNPL is another type of debt, which could lead to arguments that competent companies are doing it responsibly. In the case of Afirm, one of the biggest players in the position, founder Max Levchin (who also founded PayPal) owns it. loud voice about what he described as a “task-based” approach.

Levchin from Ukraine launched Verification in January 2012. Fintech is out in the public eye in 2021, and with a much lower 52-week high (and not shares?), Affirm today is valued at nearly $ 9 billion. , and managers are still preoccupied with the future of the company.

TechCrunch sat down Libor Michalekpresident of technology Afirm, to understand how the company differentiates its competitors, what is unique about technology and strategy, and why he thinks using BNPL is much better than using credit cards to make purchases.

(Editor’s note: This interview has been edited at length.)

TC: I grew up in the old days, where you could pay for parts of an item but you had to wait to take it home. So when I heard about BNPL, I was interested. In your opinion, what makes Affirm stand out?

We have the idea of ​​a straightforward and integrated package where we are able to fully capture the point of touch – which really gives us a more customer-focused, business experience, which allows us to write accurately.

Libor Michalek: Our main focus is on making the right customer experience. And that really reflects the idea that we have our interests aligned with that of the consumer. So if they get unexpected or unwanted, then we share the negative results.

Our second pillar is the construction of modern technology that enables us to do this. How do you deliver a financial product with no delays, no delays and deferred interest rates? It really is the ability to access real-time data, deliver it over the phone in real-time e-commerce sites, and then put it all together to make real-time decisions This information is clearly communicated to the customer. .

Another benefit we have is the scale of our business network. We work with 170,000 merchants, which enhances our ability to provide access to credit wherever the customer wants and needs.

I recently learned that Afirm (and other BNPL players) charge interest at times, but often at a lower price than regular credit card providers. Tell us more about how these decisions are made — how do you decide who can be charged interest, and who is not?

For us, the biggest and biggest difference is that with a credit card, customers know how much interest they have on the dollar differently than they pay for that purchase. There is no way to spend more than that purchase, and they will know in advance before they click.

We will communicate clearly, as interest rates are required by law, but also in dollars and cents. Many times people are surprised when I tell them that $ 1,000 buying 15% a year actually translates to $ 83 because of amortization schedules. A accountant Our website allows you to play with all of these numbers.

I think the transparency component is a beautiful key, because I feel like credit cards, you are going through that risk – it depends on how long it takes you to pay or what is the minimum you have to pay – as long as you pay the possible interest of variety. For us, it is a fixed amount that has already been announced to the consumer.

Even if they miss a payment, there is no delay, and nothing can be done about it in any way that could ever lead to a different result. Of course, if they pay early, the number may decrease, but it will never exceed the number we give.

How many people are usually able to use BNPL through Affirm without any interest charged?