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Inside Affirm's Plan To Make Online Shopping Easier And More Affordable


PSFK chats with Affirm communications lead Ellen Kiehl to talk customer loyalty, new shopping habits and emerging trends in fintech

In brief:

  • Affirm is a fintech startup that lets customers break up big purchases over time, allowing them to shop immediately from partnered vendors and pay in installments.
  • In October, the company announced plans for a new program that allows users to shop anywhere using an instant-approval prepaid card—effectively turning the brand's services into a kind of debit card system.
  • PSFK sat down with Ellen Kiehl, manager of consumer communications at Affirm, to find out how the brand implemented feedback from its users to create a powerful, transparent tool—and positioning as an online retail destination.

PSFK: How did you decide to add the prepaid feature to Affirm?

Ellen Kiehl: Over the past seven years, our customers have come to love the flexibility and predictably of shopping with Affirm—and have continually asked for more places to use our product. Thanks to this consumer feedback, we were presented with an exciting opportunity to further our mission of providing honest financial products that improve lives by enabling consumers to shop with the trust and convenience that modern shoppers deserve.

How does the prepaid card work? How have customers responded to it?

To get started, customers can download the Affirm app and browse retailers and special offers or simply type the merchant name within the search bar. They will then be directed to the merchant site via our in-app browser, and will be prompted to prequalify by entering five simple pieces of information which we ask of all customers: name, phone number, email address, date of birth, last four digits of SSN. A credit decision is made within seconds—and it won’t affect their credit score.

Once prequalified, they can continue shopping and add the item they want to their cart. Once they’re ready to checkout, they can tap the blue card button in the in-app browser to request a virtual card. They can then copy and paste the card number into the payment field in the merchant checkout. Customers are then able to select a payment plan of 3, 6 or 12 months with an interest rate between 0-30% APR.

The Affirm app also allows consumers to pay at any brick-and-mortar store that accepts Apple Pay or Google Pay by loading the virtual card into their digital wallet. Previously, users primarily shopped at one of Affirm’s 3,000-plus integrated merchants; now the new app allows them to harness their purchasing power at virtually any retailer.

How does this launch position Affirm as an alternative to credit cards?

Much like a credit card, Affirm is seamless and easy to use; however, the experience is far superior. It’s intuitive, digitally-native and highly personalized to each individual customer, flexing with their budgets and allowing them to customize repayment terms.

Our proprietary underwriting model only approves customers for what they can responsibly afford and they’ll never pay a penny more than what they agree to at checkout. As a company, we fundamentally disagree with the practice of charging consumers any late or hidden fees.

Does the company plan to expand into more traditional banking in the future?

Our mission from day one has been to build financial products that improve lives and hold true that many products offered by traditional banks are outdated and deserve to be reinvented. We continue to work toward this mission but currently are focused on making Affirm consumers’ preferred way to pay.

How was this feature impacted by the way consumers shop today?

With the rise of subscription models and increasing avoidance of credit cards—especially amongst younger generations like Millennials and Gen Z—pay-over-time options have become more widely adopted.

Are there any current trends in the finance space that you think could impact the industry?

We’re seeing a huge influx of technology in finance with technology platforms getting into finance, as well as traditional financial institutions adopting new technology to provide their customers with a better, more personalized experience—from new banking apps to the rise of robo-advisors and more.

Additionally, a host of companies are leveraging machine learning technology to better inform credit decisioning and other personalized financial offerings. This sector is one that continues to be ripe for innovation.


Lead image: #WOCinTech Chat/flickr