PayPay co-founder Max Levchin is launching a new mobile-payments company, Affirm, that is intended to help merchants lower the abandonment rate at the mobile checkout page.
From All Things D:
Levchin described Affirm as a digital charge card rather than a credit card, trying to be valuable to merchants by lowering the abandonment rate of mobile transactions. Affirm’s beta launch partner is 1-800-Flowers.
“You will essentially be putting a purchase on a digital tab, and we are going to make it work for us by looking at all available data to determine if you are someone who will pay it back,” said Levchin.
Like an American Express or other charge card, consumers will have about 30 days to settle bills, although Affirm will not be making any money from them.
Social media will be a significant part of Affirm’s consumer authentication process as it will use Facebook to confirm a shopper’s identity. Affirm will also use “other social and data signals to assess risk.” The article did mention the company could run into privacy concerns regarding its Facebook authentication method.
As All Things D points out Affirm is not in direct competition with Square or even PayPal. The company is seeking to solve a separate problem in mobile payments as consumers have shown they will abandon a purchase if the checkout process is too complicated. Affirm touts on its website it will drastically simplify the mobile checkout process.
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