Claim CEO Max Levchin on Friday praised the company’s new physical debt card offering, telling CNBC that he believes it will offer consumers similar credit card benefits, but with more initial clarity.
“It shouldn’t be called a credit card, for sure, partly because it’s a kind of anti-credit card. I don’t want to be provocative,” said Levchin in “Closing Bell,” criticizing what it considers a lack of transparency in relation to the payment of interest and fines by credit card.
“Literally, each of these things is just the opposite of the Affirm card,” added Levchin. “You know exactly what you’re going to pay. You know exactly what the payment schedule is and there will be no late fees under any circumstances, so I think it’s just the opposite in many ways. Objective: You pay for things now or over the time. “
Claim announced its debit card offer on Thursday, and the company said it hopes to make the card widely available by the end of 2021. Claim, that Levchin founded in 2012, provides what is known as “buy now, pay later” Services. It has a partnership with a number of traders, such as Pelotonand offers customers loans at the point of sale that can be paid in fixed monthly installments. Interest rates on loans can vary between 0% and 30%, but Affirm does not charge compound interest.
The claim is often associated with online shopping. But Levchin told CNBC that the company’s debit card offering is an acknowledgment of various consumer preferences and the role that offline shopping continues to play.
“I know that our user base, mainly millennials and Gen Zers, loves their debit cards. They love to do offline transactions and the purpose of this product was to bring the ‘buy now, pay later’ functionality that they really have loved online. – it’s really offline with us too, but I never had it on a card – where they are. “
According to a press release, Affirm Card users will be able to pay for a full purchase from their bank account. Or, the statement said, they can choose to pay in installments using what the company calls an “exclusive post-purchase feature”. Affirm says on its website that users will be able to manage purchases through its mobile app.
Claim went public in mid-January, gaining 98% on the first day to close at $ 97.24. The stock ended Friday’s session below that level at $ 93.06, putting the company’s market value at around $ 24 billion. The shares traded at $ 146.90 each in early February.
Before Affirm’s first deal in January, Levchin told CNBC that his “goal is to be a viable alternative to credit cards”.
Affirm that classified as No. 23 in 2020 CNBC Disruptor 50 list, was a beneficiary of the economy of staying at home, as more people shopped online and turned to their services. As the economic reopening expands and consumers start spending in different ways, Levchin said, he believes Affirm’s debit card positions him well to capitalize.
“There will be many interesting challenges with the country’s reopening, but the dominant segment that will be reopened will create many more opportunities for this product, which we have proven to be what our customer wants and needs,” said Levchin.