A major player in the ‘buy now, pay later’ industry has made its debut in the UK market, aiming to challenge established brands like Klarna and ClearPay. Affirm, founded in 2012 by Max Levchin, a co-founder of PayPal, has introduced its credit options to British consumers. This move allows shoppers to divide the cost of their purchases into multiple payments, with both interest-free deals and options that incur interest.
Levchin noted a gap in the market for longer-term credit offerings, stating, “While the pay-in-four market is reasonably well-served, there’s plenty of consumers who need longer to pay.” Affirm’s focus on extending repayment periods, such as six, nine, or 12 months, is particularly beneficial for more significant purchases like furniture or appliances, where shorter repayment plans may not be practical.
An aspect that distinguishes Affirm from its competitors is its policy of not charging fees to consumers for late payments. Levchin emphasized this approach, highlighting the company’s commitment to responsible lending practices. Affirm also conducts assessments of shoppers’ repayment capabilities before approving a purchase, further reinforcing its dedication to financial responsibility.
Although ‘buy now, pay later’ services lack some consumer credit protections provided by traditional credit products, upcoming regulations set to be implemented in 2026 will subject companies in this sector to financial regulatory oversight, aiming to curb unsustainable borrowing practices.
Affirm’s entry into the UK market follows a year of preparation, during which the company established a local team and engaged with government authorities. The UK expansion aligns with Chancellor Rachel Reeves’ recent budgetary pledges to attract investments that foster economic growth. Poppy Gustafsson, the minister for investment, lauded Affirm’s launch as a significant investment that will not only create tech-focused job opportunities but also indicate confidence in the UK economy.
The initial rollout of Affirm’s credit options includes collaborations with flight booking site Alternative Airlines and payment firm Fexco, with plans to onboard additional retailers in the future. With a global network of over 300,000 retail partners, including industry giants like Amazon and Walmart, Affirm’s presence in the UK market is expected to further enhance consumer choice in flexible payment solutions.
In conclusion, Affirm’s UK launch represents a significant development in the ‘buy now, pay later’ sector, offering consumers extended credit options while prioritizing responsible lending practices. As the company establishes its presence in the UK market, its commitment to innovation and customer-centric financial solutions is poised to reshape the retail payment landscape in the country.