Affirm: Financing Almost Everything at the Point of Sale

Over the past decade we’ve seen consumers warming up to buying everything with multiple payments. It is a phenomenon that I believe may have first started with smartphones. It wasn’t too long ago when cell phones were advertised at their full price. Now flagship models from various manufacturers are advertised first as a monthly price though there is still an option to purchase outright. The idea of purchasing items with installment payments is an area that has grown tremendously. So far Affirm has dominated the market in the US, but there are others who provide a similar service or have decided to focus on a specific niche in point of sale finance.

This idea of being able to finance almost anything is also dangerous. Just because you can finance something, doesn’t mean you should. I err on the side of having no debt outside of mortgage payments, but used responsibly I think there is value to a subset of consumers in these types of products. In some cases, true interest-free payments are offered meaning you pay the exact same amount whether you purchase it today or purchase it in payments over a few years. The offerings range from more practical purchases to non-essentials like vacations. For example, Affirm partners with Delta so that you can pay for vacation tickets over a period of months or years.

Bloomberg just highlighted a new partnership Affirm has secured which demonstrates all too well the idea of being able to finance almost anything. NFL diehards will now be able to finance their Super Bowl tickets to cheer on their team through a partnership with StubHub. According to the report, customers can finance tickets from $99 to $17,500 for up to one year. The average ticket price on the secondary market currently sits at around $7,100. Not a football fan? Don’t worry, the partnership extends to other sports and concert tickets as well. Customers receive nearly instant credit decisions with the ability to select a three, six or twelve month term. Annual interest rates will vary from 10%-30%. It’s important to note that the deals differ depending on which retail brand Affirm is partnering with. In the case of StubHub, Affirm pays StubHub immediately for the entire ticket price and Affirm will book the interest. We’ll have more on Affirm partnerships next week.

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