PayPal founder sets up Affirm mobile payments

Max Levchin, who co-founded PayPal, has launched a rival payments company, Affirm. The aim is to speed up mobile smartphone payments and to enable buyers to complete transactions in just two taps.

Buying with Affirm

Affirm-FlowWhen you check out on an Affirm merchants website you’ll see the Affirm button in the checkout flow. Log in with Facebook and accept the Affirm application and Affirm will gather a small amount of basic information from Facebook to prevent fraud and expedite the purchase process. This is a one time step which you won’t need to do for future purchases. Then once you’ve reviewed your purchase just tap to complete your purchase.

Once you’ve completed your payment you’ll be returned to the merchant site to see confirmation details and get a confirmation text and email from Affirm. There are no consumer fees – they’re settled by the merchant.

Paying your Affirm account

The downside is that you then have 30 days to settle up with Affirm and will have another online account to manage so it works a bit like a charge card. You can clear your account with credit cards, bank transfers or even paper (which strikes me as a little bit dated for a brand new technology based payments company).

Unsurprisingly there’s no mention of settling your Affirm account from your PayPal balance, that’s probably unlikely to become an Affirm feature.

Personal Information

The part I’ve not quite figured out yet is how the merchant will get my delivery address details, or how I can select to have a purchase delivered to work instead of home if that’s more convenient for me.

Currently Affirm say that Facebook is the only way to log in, although they’ll be adding new partners. Facebook certainly don’t have my home address, not to mention that I might want to save alternative delivery addresses as well. If I have to enter addresses at checkout that’s probably more friction than simply paying with PayPal.

Buyer Protection – None!

More worryingly there’s no buyer protection with Affirm, they say “At Affirm, we only handle the payment of your purchase. Since we don’t have any control over the product or service you purchased, please contact the merchant from which you made the purchase” and “To cancel an order you’ve placed, please contact the merchant you made the purchase from. They will be happy to help you”. Experience tells me that whilst most merchants are happy to help, I’d rather have back up from my payment provider for those that are not.

Affirm may need to rethink washing their hands of post sales disputes, otherwise they’re likely to find a lot of unpaid accounts when consumer are unhappy with goods that don’t arrive or services that aren’t delivered.

Will it catch on?

Payments are definitely too hard, but balancing security against ease of use is never an easy process. On balance I’m not sure I want to trust Facebook credentials as a payment method, if you do just don’t ever lose your mobile smartphone.

In reality though today’s younger consumers don’t really care as much about security, they’re used to tapping away on their mobile apps and happily leach their personal information all over the net. The next generation of internauts will probably not even give a passing thought to security and will embrace a two tap checkout as soon as it’s offered.