Guess Who’s Making Millennials Loans?

Consumers don’t trust their banks. Millennials loathe their student loans. The 2007 financial crisis has jaded consumers. It’s a bleak market, but PayPal co-founder Max Levchin wants to break the mold in a big way.

With the quiet launch of Affirm, Levchin now wants to hand more power to consumers when borrowing money. Affirm allows shoppers use a payment plan when buying online, and so far, more than 100 merchants have teamed up with the company.

The company was born in 2013 but has lately been used as a platform to promote Levchin’s ideals for putting the consumer first when it comes to banking. But now, Affirm is looking far, far beyond online shopping; Levchin now says he wants to grow Affirm into the next bank of the future, and into a lender consumers can actually enjoy, rather than hate. And that vision begins with education lending, which Levchin says will be coming “imminently.”

Breaking into the lending market at a time with millennials, faced with often crippling student loans and having their economic outlooks shaped by the financial crisis, are especially pessimistic about banks seems like a dangerous venture.

But Levchin says he understands distrust among borrowers, and is wants to change the way lenders are seen. “People born in the ‘80s have absolutely no love for banks and have witnessed their parents get manhandled by the banking establishment in the 2007-08 crisis,” he said. But through Affirm, he says, “there’s actually room for honest finance.”

Experts note that Levchin isn’t the first to imagine a new lending model more attractive to consumers. LendingClub and Prosper Marketplace are both examples of startups that launched peer-to-peer lending services; Pave, on the other hand, has taken to crowdfunding to fund student debt.

Plus, Levchin will face stiff competition direct from PayPal, whose PayPal Credit service offers online loans for customers at some of the largest retailers, including Best Buy and Target. But according to Levchin, comparing Affirm to PayPal Credit may make sense now, but it won’t in the future. “A year from now, I hope it’s not a fair comparison,” he said.

Unlike PayPal Credit, Affirm will be built for smartphones, not just the web. And unlike PayPal, Affirm seeks to grow into an independent financial institution.

So for now, PayPal may be a direct competitor, but Levchin remains in high regard from former PayPal peers. Former PayPal executive Keith Rabois, for example, has joined Affirm on its board of directors, confident in Levchin’s extraordinary goals. “With PayPal, Max reinvented how people make purchases with plastic cards,” Rabois said. “With Affirm, Max is reimagining the antiquated and opaque credit system in favor of consumers.”