Affirm CEO Max Levchin on Wednesday downplayed the threat of competition from other financial technology firms, telling CNBC’s Jim Cramer he believes the company has plenty of room to grow in its own lane.
“This idea of replacing credit card with buy now, pay later to replace credit cards is front and center. It’s gone mainstream, which is great,” Levchin said in an interview on “Mad Money.” Affirm offers those point-of-sale loans, allowing consumers to pay for items in smaller, monthly increments.
“On the flip side, buy now, pay later is less than 5% of U.S. ecommerce, maybe 3% last I looked,” Levchin continued. “So, if you look at the demand and the actual penetration, it’s going to be a long time before we start bumping into other players and saying, ‘Well, what do you have and what do I have?'”
Levchin’s comments Wednesday come one day after Affirm held an investor day, where the company further detailed its efforts to launch a debit card, dubbed Affirm Debit Plus. Levchin also disclosed Affirm’s plans to allow customers to buy and sell cryptocurrencies directly from savings accounts.
Those offerings would add to Affirm’s primary business in the increasingly popular buy now, pay later category. In a sign of its popularity, fintech companies such as PayPal and Square have recently made acquisitions of BNPL firms, and Mastercard launched its own service Tuesday.
PayPal and Square both also allow users to buy and sell cryptocurrencies, the market Levchin says Affirm is getting into. Even before Affirm’s announcement Tuesday, there was a sense that various fintech firm’s were encroaching on each other’s turf.
When asked by Cramer whether Affirm is losing customers to rivals, Levchin emphasized the company’s focus on serving customers well.
“Our consumers love us. We’re unique in a sense that we charge no late fees, we don’t do deferred interest,” said Levchin, who founded Affirm in 2012 and years before that co-founded a company that became PayPal. “We’re extremely focused on consumer delight, which is ultimately what creates this trust-based relationship. I think there’s a long way to go before we start playing a zero-sum game.”
Shares of Affirm lost 1.5% Wednesday, closing at $112.77 apiece. While the stock has struggled over the past five days, declining about 1.1%, it’s been a big winner in recent months. In the past three months alone, Affirm shares are up 67.4%.
The company went public in January.
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