EXCLUSIVE: Affirm's CFO On BNPL Differentiation, Crypto Offerings, And The Future Of Payments

Affirm AFRM is a financial technology platform that offers Buy Now, Pay Later (BNPL) plans for more than 11 million users as of February 2022, with merchant partnerships including Walmart WMT, Peloton PTON, VRBO, Expedia EXPE, Priceline, Neiman Marcus, and Williams Sonoma WSM. The company debuted on the public markets in January 2021.

Affirm’s CFO Michael Linford recently answered questions from retail investors via a Town Hall event hosted by Public.com on Feb. 23, 2022. Here’s an exclusive recap for Benzinga readers.

How do you see inflation and rising interest rates affecting Affirm's business model?

Michael Linford: Affirm is built to help address inflation for consumers. Inflation means higher prices, which means more opportunities for Affirm to solve affordability for consumers. On rising interest rates, I actually spent a lot of time discussing this on a recent earnings call. The TL;DR is that we see limited impact from rising rates on the funding side of the business for the rest of this fiscal year and FY 2023.

With a lot of talk about the metaverse, could we possibly see a crypto integration or NFT marketplace in the future?

ML: Crypto is in beta now in the Affirm app. It will be connected directly to consumers' Affirm high-yield savings accounts, in partnership with Cross River Bank, Member FDIC, which also happens to offer one of the best rates around. We wanted to give consumers access to cryptocurrencies in a way that is authentic to us. So we started with providing consumers the ability to buy and sell crypto via savings.

How do you plan to build a moat around BNPL to prevent other competitors from taking away market share?

ML: I believe Affirm is unequivocally the partner of choice in our industry, especially for large enterprise merchants that depend on having access to the best technology. In addition to being differentiated by our technology, Affirm's proprietary underwriting, ability to support a wide range of transactions and alignment with consumers really stands out. We can help solve affordability across a much broader range of price points and payment terms.

Most of our competition specializes in allowing consumers to pay-in-4 biweekly installments for relatively lower priced items, which we also offer too. However, Affirm can also help eligible customers pay over time for up to 5 years and up to $17,500. We empower consumers with the ability to choose payment terms that work for them vs. just the one-size fits all approach that others take.

Affirm has a much more diverse product portfolio compared to many of our competitors. Our technology is also why some of the largest merchants and commerce platforms in the world like Walmart, Amazon, Shopify, Target, etc. choose to work with Affirm. 

With the introduction of Affirm Debit+, will there be a credit card like offering in the future?

ML: Affirm is really the anti-credit card as we don't compound interest or charge late fees, ever. The Affirm Debit+ card effectively combines the control and transparency of debit transactions with the ability to pay over time like a credit card, but without any of the gotchas like late fees or revolving interest. 

What is your plan to advertise to merchants to grow your presence for customers?

ML: We have been increasing our investments in marketing because we see such attractive opportunities to grow our brand. I personally loved our team's campaign this past holiday season, Little Director. This, along with additional marketing investments, including in partnership with our merchants, helped Affirm achieve the highest aided awareness in our category in December at 45%. This was above all other BNPL providers. We are really thoughtful and smart about our marketing investments. So, while you may not see us overspend on a Super Bowl ad, we are investing in marketing to help people understand who we are, how we're different and why Affirm is the smartest choice to pay over time.

Public.com members can view the full Q&A in the app. Open To The Public Investing is a member of FINRA and SIPC. This content is not investment advice. Investing involves risk of loss.