The first stop for overseas expansion! Affirm (AFRM) launches installment loan business in the UK – US Stock Investment Network

US Stock Investment Network learned that US financial technology company Affirm Holdings (AFRM) announced on Monday that it has launched an installment loan business in the UK, marking the company’s first overseas expansion. Founded in 2012, Affirm offers flexible installment options and underwrites every transaction before a loan decision is made, with no late fees. Authorized by the Financial Conduct Authority (FCA), Affirm offers interest-free and interest-bearing monthly payment options in the UK, with planned interest fixed and calculated on the original principal.

Currently, Affirm has more than 50 million users and more than 300,000 active merchants worldwide, including Amazon (AMZN), Shopify (SHOP) and Walmart (WMT). In the UK, the first merchants to offer Affirm as a payment method include Alternative Airlines and Fexco, with more brands expected to join in the coming months.

Affirm CEO Max Levchin said that the company has been preparing to enter the British market for more than a year and chose the UK as its first overseas market because it saw huge demand from local merchants.

“It’s a huge market, and it’s English-speaking,” making the company a good fit for the market, Levchin said in an interview last week ahead of Affirm’s entry into the U.K. market. He added that Affirm would eventually expand into other non-English-speaking markets, but that would require more effort.

It is reported that when launching the company’s buy now, pay later (BNPL) service in the UK market, Levchin said that despite the fierce competition in the UK financial technology sector, Affirm has successfully attracted investors with its unique financing products such as its 36-month installment plan. This attracted huge market attention, which sealed the deal for the company to enter the UK market.

Competition is fierce

In the UK, Affirm will face competition from large players including Klarna, Block’s (SQ) Clearpay, Zilch and PayPal (PYPL), which have already entered the BNPL market in 2020. Levchin emphasized that what sets Affirm apart is the range of financing products it offers, particularly its payment plans of up to 36 months, which provide customers with more flexibility.

As Affirm launches in the UK, the UK government is also consulting on regulatory plans for the BNPL industry. One of the key measures being considered by the government is requiring BNPL providers to provide clear information to consumers, ensuring people don’t pay more than they can afford and giving customers rights if things go wrong.

Levchin welcomed the move, stressing that Affirm does a lot of work behind the scenes and is good at automating and writing software to ensure the responsibility isn’t put on consumers. He noted that “it’s dangerous to put the responsibility on consumers.”

After months of discussions with regulators, Affirm received authorization from the Financial Conduct Authority (FCA), the UK’s financial services regulator. Levchin said the company’s “good reputation” helped in the authorization process.

He emphasized that “we have never charged a penny in late fees. We do not charge late fees. We will not do any anti-consumer behavior that is unacceptable to people.” Therefore, Affirm has a good reputation in consumer rights protection, which This is one of the reasons why merchants like Affirm. With the launch of the UK market, Affirm plans to continue to expand its global presence.

Information source: US stock investment network TradesMax.com US stock big data StockWe.com