Alternative Finances

Affirm Expands Payments To ‘Experiences’

What’s a millennial to do? They want to have those valuable life experiences (like Coachella or a weekend in Costa Rica), but they just don’t seem to have the cash. Well, now, they can have their experience now and pay for it later, without the pesky nuisance of credit card debt.

According to recent statements made at Shoptalk and reported by TechCrunch, lending company Affirm will be partnering with Expedia and Eventbrite to offer extended payment plans (that’s three, six or 12 months) for intangible experiences, including vacations and live events.

Affirm originally launched with niche partners, like Casper mattresses and Boosted Boards, but, more recently, has expanded its offering to include more mainstream retailers, like Home Depot and J.Crew. The company was, it seemed, testing the waters for just how many consumers would be willing to adopt their form of fixed monthly payments for goods purchased.

One major concern, as the app shifts from purely goods into the experiential realm, is whether users will follow through on payment plans after a trip or event has ended. With tangible goods, TechCrunch explains, there is a continued reward of ownership felt by the consumer as they use a product over time. However, with trips and events, the gratification is instant and shortlived. While it makes sense to finance a trip you are going to take over the course of six months leading up to travel, it seems less likely that those who make last-minute travel purchases will find the same motivation to continue to pay after their trip has passed and faded into memory.

The company’s response to this? Affirm insists that it will be treating travel and ticketing the same way as material goods, using “thousands of data points” to assess a consumer’s ability (and likelihood) to repay over time. And, as TechCrunch notes, if repayment trends start to dip, the company has a plan to “adjust their models accordingly to ensure they approve consumers in ways that maximize repayment rates.”

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PYMNTS STUDY: THE CROSS-BORDER MERCHANT FRICTION INDEX – JUNE 2020

The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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