Looks like Sauls concerns about Affirm’s risk of carrying their loans may be coming to fruition.
https://www.fool.com/insurance/life/2021/10/14/affirms-users…
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I think it’s way premature to say that Saul’s concerns about Affirm are coming home to roost based on that article.
I have been digging deeply into Affirm to see whether Saul’s cause for concern is warranted. The jury is still out because as Saul mentions, it’s hard to tease everything out. My goal over the next week is to understand what I can from their reports, and ask Investor Relations questions to fill in the gaps.
The two big things I want to understand is: 1) Is their AI/ML improving their selection process? 2) Is there concern about funding their loans? Anything else big I am missing? Let me know and I’ll add it to my research.
But regarding the article you posted:
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It’s making a really big deal about the users falling behind. But if you look at the numbers it posts, the actual long term default rate is the same as the prior two quarters, and half what it was a year earlier. The big jump in delinquencies is the doubling of ultra short term late payments (4-29 days past due) from 1.1 to 2.2, which explains almost all the rise. And, given there are no late fees, this would be natural, right? I don’t pay a late fee, I’m more relaxed about getting the payment in.
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Another big deal point is the lowering of the credit scores of the buyers. Well, duh. That’s what Upstart is doing, too, and we love them for it. Affirm has pointed out that they are expanding into underserved buyers - just like Upstart. Of course that will lower the credit score of the average borrower.
What needs to be determined - and it has not yet been determined, so it COULD be a warning sign and it MIGHT NOT be a warning sign - is: Is this by design or is this poor underwriting? What matters is the overall performance of your portfolio. If they go into a lower-credit-score space and get more $$ through higher interest rates and have higher losses but greater revenue because of it, is this a bad thing if in the end their delinquencies are not that much higher and their portfolio performs well?
And if they do this aggressively because they want to use their AI/ML to get more learning about who their good customers are, and they cull the bad ones and keep the good ones, that may be brilliant as their repeat borrowers are a huge portion of their business (65% I think but don’t quote me yet) and after one low-cost transaction (compared to Upstarts much larger personal loans) they know who their good customers are, and if they can get those loyal customers to repeat on forever, the cost might be worth it.
I have a huge position in UPST and a much smaller position in AFRM but I actually think there MAY be a there there with AFRM. But as Saul points out, it’s much harder to understand. I think that may be because the team does not have the communication skills (clarity by management) that the UPST team has. Is this by design (bad) or are they just not great communicators? The CEO seems like a classic tech dork but that is not necessarily a bad thing for me. As I mentioned, I will be digging deeper and hopefully post some news that is relevant to the board in the next week or so.
But that article did nothing to change my mind about AFRM at this point.
BNPL is huge and disruptive and here to stay. It’s a fiercely competitive space but AFRM looks to be gaining the most traction with the big partners. It is worth the effort to understand it better.
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I know this is repetitive but repetition is the mother of mastery.
With past high allocation, big winners here - Shopify, Twilio, Zoom, CrowdStrike, Cloudflare, Upstart, no one ever worried about complexity or had to work hard just to figure it out how they work.
Solazyme, Nutanix, Teladoc all come to mind as more complex stories. Even relative under-performer Snowflake, same is true.
When the CEO can’t cleanly, simply and directly articulate exactly what he’s doing and how it works, it is a flag so red it matches Kim Jong Un’s underpants.
The formula for trouble is this: Complexity + Alleged Giant TAM = Monstrous Loss.
Bad communication is a symptom of a story that’s grown too complex. Cloudflare is a massive undertaking, and no doubt there is epic complexity in the infrastructure, processes, software, hardware etc needed to build that globe circling monster. But they relentlessly stick to three core values that define their vision of a “better” Internet - speed, reliability, security. And all their epic innovation fits neatly into these three lanes. So exactly what Prince, Zatyln and CTO Cummings are doing always feels in control. The complexity is not an issue.
A martial arts principle is to never go faster than you can control. To me, having watched clips of Levchin - brilliant as he is - ramble to the point of laughing at his own long-windedness is not good.
The gamble one takes on this is that the complexity is an advantage. That if the individual investor is smarter than everyone else they can solve the puzzle and unlock hidden value. This of course could and may work here, but it makes no sense to me to try to take the rocky, winding up path up the mountain when we have such solid, simple, straight forward ones - MNDY, ZI, UPST, CRWD, LSPD - to walk.
Wish all AFRM investors luck, but at best it’s a divergence from what’s worked and inevitably a much riskier path. Lastly, I’ll just point out Saul is a Harvard educated former math champ. If it’s too complex for him, you best be one smart **********er to get this right.
This simpleton Fool taking a hard pass. And like with the car company we dare not name, I didn’t lose a cent missing out on that. And won’t lose a wink of sleep if miss out on this as I know why I’m passing.
BD
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Well, Broadway Dan, I appreciate your warning.
And if I had read a post about Affirm in which someone had tried to deeply understand their business and failed, I would agree with you. What I am trying to figure out and have not seen the evidence for is - has anybody put the effort in, say, that JohnWayne has put into UPST, and come up blank?
The model itself is brilliant and not complex at all. Unbundle the credit card, offer BNPL on bigger purchases, and target users who are distrustful of credit cards as well as users with “thin profiles” similar to UPST. Use AI/ML to improve your loan loss OR increase your market. McKinsey says BNPL is here to stay and for me, there is no dispute about that. Are there people on the board who think BNPL is b.s. and is that why there is less interest? That would be a good data point for me to know.
The devil is in the details. I have not read all the AFRM reports and watched all the presentations - in fact, I have not dug very deeply at all yet. Truthfully, I was lazily hoping someone else would. But has anybody done this and not posted? Because I know JohnWayne has read them all for UPST, and that has helped inform YOUR decision. And mine, too.
AFRM is talking about 4 ways of funding their loans and significantly lowering of the need to fund themselves, all sounding good and addressing Saul’s worry, I believe, but not being a finance person, I have a hard time understanding what these funding sources mean. One of the funding sources is the same as UPST - securitization. AFRM talked about good sales of their securitized loans due to short duration and good credit profile. Is anybody on this board online doing the KBRA or whatever that acronym was analysis for AFRM that they did for UPST to prove or disprove this? If so, I would love to hear from them.
They are talking about AI/ML working for them but I have not seen the numbers. I have not seen the numbers because I have not looked. Has anybody looked?
So here is my request to the board: Has ANYBODY tried to really understand this space and firm by digging into the AI/ML and also the sources of funding at a JohnWayne level (JohnWayne, you are now and an adjective, and should probably be a verb, too, you deserve it) or are people just worried based on a high level assessment and / or general lack of interest in the BNPL space?
If somebody has really tried to understand this at the JohnWayne level and failed because of complexity then I would be ready to sell TODAY.
But I deeply disagree - at least for the time being - with your complexity statement. For me right now it’s ONLY complex because I haven’t wrapped my head around it yet and I haven’t read anybody’s analysis that has. I spent 40+ hours on UPST before I really added to my holdings and read a bunch of analysis on this board, too. I plan to spend the same amount of time on AFRM and at that point I’ll make a decision and it may very well match your statement that it’s too damn complex and it may not. For now, I’m happy to continue to watch my AFRM position grow.
I wasn’t around for Nutanix but judging by the past posts, it seems there was way more detailed back and forth about it then AFRM. Buy maybe not.
P.s. I don’t really understand Cloudflare either, WAY too complex for me at the detailed level, so I guess maybe our definitions of simplicity might differ, too…. Btw, I own it though, thanks to MUJI and others putting so much effort into it.
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Solazyme, Nutanix, Teladoc all come to mind as more complex stories. Even relative under-performer Snowflake, same is true.
When the CEO can’t cleanly, simply and directly articulate exactly what he’s doing and how it works, it is a flag so red it matches Kim Jong Un’s underpants.
Correct in principle, but not in examples.
Snowflake, for instance, has an easy elevator pitch: The easiest to use cloud database (SQL and noSQL) that handles all scaling and performance tuning for you, plus provides a unique data-sharing between companies capability that could provide additional revenue for Snowflake customers.
Nutanix, and I say this only with 20-20 hindsight, was not that the CEO couldn’t directly articulate what his company did, it was that he didn’t want to. Nutanix is an easy and affordable way to stand up a scalable private cloud in your own datacenter. Pretty simple, eh? The problem was, and still is, that few companies want private clouds in their own datacenters anymore - the public clouds are just so good and easy. I believe Nutanix’s CEO and marketing team recognized this, and so intentionally described the offerings in ways that made it seem that Nutanix was able to easily move your corporate applications between your private and the public clouds. Turns out that’s only possible if you run Nutanix on a public cloud, but then you’re not able to take advantage of most of the services (databases, APIs, load balancing) those public clouds provide. That’s a much less compelling use case and hence with a core business in a dying market and a future business that has a serious practical limitation that can’t be overcome, Nutanix’s business didn’t grow. But, it wasn’t that the CEO couldn’t summarize what the company did.
As for Cloudflare, well that’s a complicated offering. To their credit, they do summarize their business relatively simply (from their home page):
Cloudflare is a global network designed to make everything you connect to the Internet secure, private, fast, and reliable.
• Secure your websites, APIs, and Internet applications.
• Protect corporate networks, employees, and devices.
• Write and deploy code that runs on the network edge.
But, that leaves out their CDN and DNS offerings (performance), for instance. Is performance not important anymore? Cloudflare is a combination of CDN, a zero-trust security provider, an edge computing network, a DDOS preventer, a DNS resolution provider, a Web Application Firewall, a SASE, and it’s own private internet backbone. How separate and how unified these product offerings are I honestly don’t know, but I guess it can’t be too bad given the business growth.
Back to communication, Cloudflare makes general claims that only apply to limited subsets of their products (eg, “no code changes required” on the home page when it only applies to a few of the products, certainly not their edge network or zero-trust solutions). Maybe I’m too technical, but when Prince talks I cringe. But, he’s clearly a good spokesperson/salesman for his main audience of stock analysts, which is what’s required of public company CEOs today. And management is certainly capable, as they’re able to build a good sales team that’s able to sell these diverse products to enough customers. I do own shares, but it’s not a top position for me. I would think the key for Cloudflare is to get a foot in the door with one or two products that perform well and then upsell the customer on other offerings. That will be easier for medium and small companies, but I think they have an uphill battle with larger companies where success in one area doesn’t necessarily translate to other areas run by different people in the target company.
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One big question I have with Affirm is with regards to their competition.
Affirm states that they are capturing all the data in their transactions. And according to CEO Max Levin, other payment networks are not doing this (see https://twitter.com/MarceloPLima/status/1443201399874113537). If this is the case, then it should be a great competitive advantage.
I would like to verify that Afterpay (seemingly their main competitor in the BNPL space) is not capturing all of this data. I would also like to know what type of risk model Afterpay is using. (E.g. are they using a traditional risk model that relies mainly on FICO scores?) I haven’t made much progress investigating this. Would love to hear from anyone who knows more about this.
Also, FWIW, MF analysts Brian Feroldi and Brian Stoffel posted a YouTube video today in which they do a surface level investigation of Affirm. Their focus is on “How to Research a Stock from Scratch,” so they assume no prior knowledge and spend some time going through Affirm’s documentation on their Investor Relations page, and other info. This was helpful for me, because I have not done a lot of this type of investigation. (I am trying to remedy that.) Here is the link: https://www.youtube.com/watch?v=_aAWiSqZkdA&t=3s
Full disclosure: I am long AFRM, but still accessing the risk
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Thanks Smorgasbord, I think something being hard to understand depends on your back ground and also just how much effort you put into it. Everything seems hard till you have given it your full attention and really looked into it.
Andy
Are we really to believe that Square/Afterpay, Visa, MasterCard, Amex and the myriad of others are not capturing this data? This seems inconceivable.
As mentioned in a previous thread, I was set up on a new Amex BNPL agreement in literal seconds - same terms that Affirm appears to be offering. 3 months absolutely free. 6 and 12 months for a small fee.
I understand Amazon has an agreement with Affirm for now, but they have ALL the data. LSPD has a ton of data. SHOP has a ton of data. Costco(!) has a ton of data, their own MasterCard. Doesn’t Amazon also offer a MasterCard? How long until the other behemoths come after this space? Just not convinced. Happy to be wrong here.
Can’t believe they’re all gonna sit around and pay Affirm for this indefinitely. That’s literally what they use their data for. Amazon Basics. Kirkland Everything.
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Can’t believe they’re all gonna sit around and pay Affirm for this indefinitely. That’s literally what they use their data for. Amazon Basics. Kirkland Everything.
Right they all have the data but they don’t have the AI/ML foundation. All the people you mentioned were built on the old technology. You know. You buy it on the credit card, don’t pay it off, then you are being charged 25% APR, oh and that can change. You don’t like it tough. Pay off the bill. With Afrm you know exactly what the interest rate is when you use it. It doesn’t change. You might even be able to get the item interest free. But no matter what, you will know the price you are paying. Most of Afrm BNPL customers are only borrowing the money for 6 months. Why is that good. Well if rates start rising they can re-evaluate their model. What does the Credit card companies do? They raise your interest rates on the amount you have on your card. Therefore locking you into long term debt.
Anyone that says that credit cards are better than Afrm for the consumers are just wrong. The credit card companies are even showing you that the BNPL model is better. They are all trying to move to it. Yes they will be able to write their own AI/ML model, but the question is can they catch up?
I was at Dick’s Sporting goods yesterday and right on the POS it said Pay with Afrm. In the last quarter Afrm stated that they were not including Amazon or Affirms product Debit Plus. Both of these could be huge. A friend of mine, who is not exactly poor, recently bought a product on Amazon using the BNPL product. He Said “Why wouldn’t I, I am using their money” that is exactly what anyone who has money would say. Why not use someone else’s money if you can get exactly what you want.
Here is a little write up I did for myself.
Affirm has been able to hitch its wagon to the merchants’ neverending need to increase sales, now making it even easier for cash strapped people to spend. There have been many occurrences in the past (sub-prime mortgages, for instance) where similar dynamics were at work. It all seems like a good idea, and it works, until it doesn’t. This is one business where I am not convinced that it is a value add for society, but I emphasize this is a very personal opinion.
Afrm isn’t just a Buy now Pay later (BNPL) company, they also allow people to set up a high interest savings account in partnership with Cross River Bank. They already have over 300 million in savings in those accounts. They have an App that allows people to shop for items from participating merchants and they are making crypto trading to be available on their platform also. The crypto sounds a little gimmicky but alot of financial sites are getting into it.
While I can understand why people might not like another way for people to go into debt, with AFRM, they are very transparent. you set up a no interest BNPL with them or pay an interest rate that is much cheaper and easier to pay off than a credit card. This seems to be much more friendly than Mastercard, Visa, and Discovery. These credit cards are trying to catch up with the BNPL space. Afrm also setup a debit card that they call debit +. With this card you can debit an item, from your bank account, that you choose to link to, and if you decide that you would rather it wasn’t taken out of your account you can set up a BNPL plan from the card. Afrm, as I mentioned earlier is with Walmart, Amazon (which is in a test phase and really hasn’t taken off yet) Target, and Shopify. They also have many companies that directly work with them and even travel companies like Priceline and Expedia. You can use these partners to set up a BNPL plan to go on vacation or buy a product and you set up the terms, whether they are for 3 months up to 48 months. Yes, if you were to set up a vacation and pay it off in 48 months that could be a financial burden but how many people put their vacations on Credit Cards and never pay them off?
Their Revenue Growth looks like this.
Q120 Q220 Q320 Q420 Q121 Q221 Q321 Q421 Q122
69.18% 86.61% 89.09% 120.29% 97.82% 56.98% 66.82% 70.73% 43.7%
Next Quarter they are expecting Revenue Growth of 43.7 percent at the high end. This is without adding Amazon or their debit + product. They expect Pelaton to be a lower percentage of their Revenue since the country is now getting back to normal. That is quite a drop in revenue and for their growth to really get back into the 70 percent growth you would really need to think that Amazon or Target was going to really take off or by Christmas that they will see a big boost in growth.
Their Operating Margins look like this.
Q120 Q220 Q320 Q420 Q121 Q221 Q321 Q421
-37.5% -25.1% -58.9% 25.64% -25.7% -15.6% -73.5% -47.6%
As you can see their operating margins are all over the place. It’s hard to get an idea of profitability. They are spending a massive amount of money.
Conclusion:
Afrm just ipo’d on January 13th, 2021. They have only been reporting for three quarters so it is hard to fill in all the dots with such a new company. They are unprofitable, their FCF is negative, They have more debt on the books than Cash.
They are growing fast but they are projecting a faster drop in Revenue, but that was without the Debit + product, Amazon, and now Target. They have a P/S of 20 with Revenue growth projected at 43.7% which I think will be low. I think going into Christmas they will see accelerated Growth and by Christmas they could get back into the 70 percent growth range. But after Christmas we will see a drop in growth due to the seasonality. Afrm has a seasoned Leadership team, with Max Levchin, leading the way. I think their P/S of 20 and Growth in the 40’s makes this company reasonably priced. Especially if they can keep growing faster.
Andy
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I would like to verify that Afterpay (seemingly their main competitor in the BNPL space) is not capturing all of this data. I would also like to know what type of risk model Afterpay is using. (E.g. are they using a traditional risk model that relies mainly on FICO scores?) I haven’t made much progress investigating this. Would love to hear from anyone who knows more about this.
Afterpay do which is partly how they then use their data and their members as channel for merchants (e.g. Amazon), where they are rewarded for customer origination.
They are also looking at ways they can monetise the consumer data they capture. They probably know more about Millennial and Gen Z spending than anyone.
They have a self cleaning loan book. They do not do credit scoring although they do simple verification, but they limit the amount and frequency a new consumer can purchase and do not provide follow on lending until the first is paid off. They are never going to be on the hook for a $2k default of a Peleton purchase with a new consumer. Existing consumers have to work their way up to that kind of lending limit. Now that they merge with Square which has Cash App they can even offset lending against balances and use cash balances as a financing source.
The quality of the lending is very high and defaults have remained very minimal.
Ant
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anthonyms - thanks very much for the details on Afterpay. This changes the equation for me.
So when Max Levin said the “other payment networks” were not collecting transaction data, I assume he we referring to the traditional networks (Mastercard, etc.)
With regards to Afterpay and Affirm, it seems a lot will come down to who executes better, and/or who has the better risk models. I think these factors are unknowables at this point.
I expect Affirm will do very well, but I have trimmed my position to 1% and I will leave it there for now.
One of the often quoted characteristics of Saul stocks is the FCF and the ability to be profitable if the company turns off the S&M expenses. Looking at Affirm, how is adding new vendors enabling them to become more profitable? With each additional partnership and the proceeding sale, they have to carry more debt on the books for the sale.
The area that Affirm can be different is similar to UPST, they have a AI model that’s able to assess the risk of the customer better than the existing players.
Btw - I have been a AMEX card holder for a decade and didn’t know they had a BNPL program - they need to improve their advertising!
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One of the often quoted characteristics of Saul stocks is the FCF and the ability to be profitable if the company turns off the S&M expenses. Looking at Affirm, how is adding new vendors enabling them to become more profitable? With each additional partnership and the proceeding sale, they have to carry more debt on the books for the sale.
First of all if you really believe this than you have to love Afrm. They spend a lot on S&M Expense. Also it is just not true that when they add a vendor they carry more debt.
I think Afrm is being maligned by people that just have no clue what their business model actually is. They have an app that allows people to go onto it, with stores that they are aligned with, and buy a product. When picking the product they choose their payment option. It can be BNPL with a known interest rate or it can be a 0% interest rate. If it is a zero interest rate it is something the company is willing to give.
The whole thing is that is a simple interest rate. What that means is that is does not compound on the interest rate. Everyone of us should be cheering for this because it makes the borrowing of money much less onerous.
Not only do they have this product but they also allow people to have a savings account that has a higher interest rate. You can save your money and make more than with any other bank.
Finally, and this is not the only Point, but they are aligned with Five river bank. Yes the same Five River Bank that is aligned with UPST. So anyone that thinks that Afrm is somehow an investment that is morally objectionable should not be holding UPST in their portfolio.
Andy
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I am a happy shareholder of Affirm. Feel free to inverse me. I’m almost always wrong when I go against the collective wisdom of this board.
It’s pretty clear to me that they are aiming in their Super App to build a product that it is very similar to Square’s Cash App, which we’ve seen is a very lucrative business.
I deeply admire Affirm’s go to market strategy in this.
I asked my father to send me some money via Cash App. It was the most cost effective way to send the money. We both deleted the app right afterward.
By getting Affirm into Walmart, Shopify, Amazon, and Target they are building a big brand presence, linking their new digital native brand to the perceived legitimacy and stability of these more established names. Droves of customers are going to download their app - and these customers are not going to delete the app because they will be making monthly payments for however long. I don’t have room in my phone or in my life for lots of fintech apps. If I am using AFRM for BNPL, there is a good likelihood that over time I’m going to migrate more and more of my activity to this app, which I must keep, and start deleting apps that I am not tied into.
In short, Paypal, Square, and Affirm are all trying to do the same thing, and I really think Affirm has the best go to market strategy. It’s a stroke of brilliance as far as I’m concerned, and it seems like Square sees it too with their acquisition of Afterpay. I own Square. I see room for two companies here. Square, with Afterpay, should do a great job in markets like Australia where Afterpay has already dominated. In North America, I think Affirm has the edge.
It’s all about execution. In that, I do have faith in Levchin.
Long Affirm 2.5%
Long Sq .5%
(I have a 40 stock rule breaker portfolio and well as a concentrated portfolio, both of these positions are in my diversified Rule Breaker portfolio)
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I own a relatively large e-commerce brand and am a merchant customer of Afterpay. My business operates primarily in Australia/New Zealand which has witnessed strong customer adoption of BNPL services (for context 60% of NZ/Aust customers have used a BNPL service vs 47% in the UK and US). I would be happy to answer any questions that anyone in the group has regarding the merchant experience and the value proposition offered to both customer and merchant by BNPL services. Square and Affirm are both high conviction holdings in my portfolio.
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Scott,
Are there any advantages to one BNPL service provider over another?
Your experience is based wholly in ANZ? Any other regions that you see consumer behavior from?
What costs of operation are inherent in the BNPL options? How are those offset by additional revenue, other benefits?
Would you rate BNPL as more or less desirable than credit?
Are you seeing any activity from new entrants into this area that would give you reason to study/switch service providers?
Would you have reservations about using multiple service providers?
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Are there any advantages to one BNPL service provider over another?
Yes. We currently offer two BNPL services (and have trialled a third being Paypal). Our customers overwhelmingly choose Afterpay. I believe there is a strong first mover advantage with BNPL hence why Square bought rather than built. Customers don’t want to sign up to lots of different services (inconvenient and hard to track spending) and merchants don’t want to clutter their product pages and checkout with too many options leading to a clumsy UX and analysis paralysis. I believe that Afterpay and Affirm have brand value. Despite the fact that Paypal charge us next to nothing in fees to implement their BNPL service we removed it from the site as customer uptake was close to zero. I believe this is in part due to an awareness issue (customers dont associate BNPL with Paypal) and possibly could be a geographical issue also (possibly less uptake of Paypal in Aust/NZ).
Another unforeseen benefit to us from joining Afterpay is that they have become a major traffic source for us through their website and app, and when I say big I mean big. They are our third biggest trafiIc source - after Google and Facebook/Instagram! Customers will use the Afterpay app/shop directory to discover brands. I know Affirm operates in a similar manner.
Your experience is based wholly in ANZ? Any other regions that you see consumer behavior from?
No sorry. I have no doubt that this is a worldwide trend. Consumer behaviour in NZ/Aust is very similar to other modern Western democracies.
What costs of operation are inherent in the BNPL options? How are those offset by additional revenue, other benefits?
Afterpay charges us around 5% of the transaction. Our average order value is around $250 (this is higher than average for ecommerce). We sell wall art (framed and unframed art prints) BNPL later accounts for around 20% of payments we receive. Interestingly it doesn’t necessarily skew to large purchases only. We see customers commonly using it for cheaper products also (our products start at around $49 upwards).Our conversion rate has increased from 1% to 1.3% in the last 12 months. That is a big increase! I believe that BNPL has played a significant part in this although to be fair so too may have the long lockdowns we have endured here in NZ.
Would you rate BNPL as more or less desirable than credit?
More desirable. Consumers enjoy the convenience of paying off purchases over time without being charged interest though they can incur late fees ($10) for missed payments. Unlike credit cards in the event that they miss payments they don’t become subject to the perils of compounding interest. I know concerns have been raised about this on the board and on #Fintwit but anecdotally I haven’t seen this play out.
Are you seeing any activity from new entrants into this area that would give you reason to study/switch service providers?
I believe BNPL is sticky for the reasons I outlined in response to your first question.
Would you have reservations about using multiple service providers?
We currently use two (one domiciled in Aust (Afterpay) and one in New Zealand (Laybuy)). I would not look to add a third.
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I was a long term shareholder of Afterpay.
ScottMS’s comments were spot on and explained most of the points I would like to mention. One standout is Affirm taking cuts from both sides. It charges interests (up to 30%) to the end users. AfterPay charge 0 interests to the end users. The only fee AfterPay charges the end users is the late payment fee which is around AUD10. Affirm is not better than credit cards. When all these hypes of BNPL gone(US is a slow adopter in this sector), I think Square/AfterPay is in better position to capture more market share.
I stay away from Affirm.
Cheers
Will
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