How Affirm Could Have Really Made a Difference With Its IPO
It’s too late now.
Affirm, the company that lets you pay for purchases over time (often with zero interest), went public on Wednesday. And the stock has soared.
I’ll eventually get to an article detailing why I like Affirm and other financing platforms like it. I’ll keep today’s riff short and sweet.
I think I was a fairly early adopter of Affirm. So, this morning, I got an email from the CEO, Max Levchin. It said, in part:
At Affirm, we build honest financial products that improve lives…
Today, Affirm is taking a step forward in our journey by becoming a publicly traded company, a step we would not be able to take without you.
While this is a momentous occasion that we want to celebrate with you, our merchant partners, and our team, our work is far from finished…
Thank you for your trust and partnership.
Sounds great. But it’s pretty empty rhetoric.
As with traditional credit, Affirm puts you in a somewhat precarious personal financial situation. You walk a fine line when you opt — at checkout — to pay for a purchase over time, even if it’s interest-free.
First, you’re spending money you might not have or could comfortably part with — at least in the moment. Second, if you’re like me, Affirm “makes” you feel okay about spending more money than you otherwise would.
If you manage your relationship with Affirm well, it beats the hell out of credit cards by a mile. Affirm can function as an excellent tool to help you responsibly and effectively manage your money. These benefits (and others) outweigh my concerns. While I advocate not carrying a credit card, I’m on board with Affirm.
I think the company has its heart in the right place.
This said, the email made me laugh. It wreaks of false empowerment and slick marketing. Spend more, take on these monthly payments, and together we can improve your life!
We should have received this email a few months ago with a link to secure shares — at the offer price — in the company’s IPO. This would have been righteous compensation for our early “trust and partnership.” For many consumers who gravitate toward services such as Affirm, this would have “improved” and, quite possibly, changed lives.