For more details, highly recommend listening to this deep-dive on Visa’s business. This could all be digitally added to your credit card bill.). If their infrastructure allowed them, consumers won’t need paper receipts.
Invisor underwriting millions customers full#
(Remember the last you returned something at Walmart, the reason you always need a paper receipt is that Visa or Mastercard’s old infrastructure don’t allow you to see full details of any transaction done at a store like Walmart. Importantly, currently, today when a consumer makes a transaction on Visa or Mastercard, these big credit card companies cannot see the actual item purchased, they can only know that a transaction or payment has gone through their system since they are protocol companies. They have seen over 20% repeat rates for consumers within the same retailer over the last 12-months.Īffirm’s second most powerful moat is the Store Keeping Unit (SKU) level data or popularly referred to as the purchase item-description data. It is gaining rapid rapport amongst millennials and Gen-Z as can be seen below, Over >64% of transactions were driven by repeat users in FY 2020. Personalization of your shopping experience: Consumers can get personalized products and payments while they avoid late and extra fees and rates that credit cards impose on consumers.Ĭonsumers love the model. Gradually, in early 2022, consumers get rewards, points, and cashback on their transactions.
No consumer would want their credit underwritten multiple times at different merchants. The consumer gets convenience, purchasing power, and the product at their terms.Ĭonsumers get better payment deals structured around how they prefer to best pay overtime.Ĭonsumers can shop and discover discounted products and better prices from a wide variety of merchants.Ĭustomer experience and delight: Most consumers would prefer to have only 1 or perhaps 2 maximum providers for their BNPL services when they go shopping. This proves that Affirm’s BNPL has a good form of stickiness amongst merchants. They help save the merchant’s time and effort by taking care of any consumer inquires, experience, and the entire pre/post-purchase customer experience (with the acquisition of Returnly).īased on all the following points listed above, merchants are happy to pay a 5-6% merchant discount rate (where they pay Affirm back for every purchase sold) because the BNPL model contributes a significant amount of ROI & bottom line to the business.Īs a result, Affirm has maintained an impressive dollar-based net retention of >100%+ over the last four years while retaining a significant cohort of merchants. Merchants payment: Affirm pays the merchants the cash for the item purchased immediately. A big merchant like Amazon doesn’t want to have multiple BNPL at checkout, so they would rather have only one main provider. Provide merchants with advanced customer data & insights for their store, products, and consumers.Ĭonvenience: Merchants want a BNPL that is patronized by other consumers who shop at different big stores.
Provide lead generation, marketing, and driving traffic for the merchant brand through understanding consumer behavior on the Affirm App. Help drive the number of repeat and habitual consumers to a merchant. This leads consumers to be able to afford Higher Average Order Value items, reduce abandon rates at the cart and increase their purchasing power based on their ability to repay. Apple loves its partnership deals with mobile carriers because they sell when consumer prices are affordable. Increment in sales by making product payments more affordable and convenient based on the time value which increases sales conversion and more upselling at checkout. Affirm offers the following for merchants: Merchants care about: Sales, Average cart order value, Repeat Customers, Upselling at Checkout. Let’s evaluate the benefits for both parties that make this moat strong: For every transaction on both side of the network, Affirm' significantly improves their internal AI/ML risk models, brand, payment engine and a significant amount of data. Fundamental to Affirm’s moat is the business model of a two-sided network that has a powerful network effect that adds incremental value to both customers (B2C) and the merchants (B2B).
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