Meet "Affirm [2]", a startup from PayPal co-founder Max Levchin whose mission is, according to the "company" section of their website, "[to use] modern technology to re-imagine and re-build core components of financial infrastructure from the ground up… focusing on improving the lives of everyday consumers with less expensive, more transparent financial products."
Can’t decipher that? That’s ok, neither can we.
Fortunately, Affirm sums it up more succinctly in the "buy with Affirm" section: "pay over time for your most important purchases."
Now we understand. Essentially, what Affirm does is "connect directly with online stores" and then loans you money to buy things from said stores.
But not just any things.
"Important things."
Like $1,000 Air Jordans.
Here’s Hypebeast [3]:
Longing for that rare pair of kicks that you need to have but can’t cough up the money? That doesn’t have to be a problem anymore, because Flight Club is now offering financing options for up to a year. Leaders in the consignment game, paying for these pricey kicks has always been an issue especially with younger consumers as prices can go up into the thousands. Much like buying other pricey items such as cars, houses or jewelry, you’re now able to finance goods (borrow money) from a credit company as long as you agree to pay it all back, with interest. Partnering with AFFIRM, Flight Club kicks such as the ”Fragment” Air Jordan 1 is at $123.01 USD a month, while the Nike Air MAG is at $702.90 USD a month. This seems much better than coughing up the total amount at check. The process seems simple enough:
Enjoy your purchase immediately, with no hidden fees. Provide some basic information and get instant approval to split your purchase (up to $10,000) into 3, 6, or 12 monthly payments with rates from 10-30% APR. Just select Pay with AFFIRM at checkout.
Hypebeast then asks: "would you finance your kicks?"
And while we'll plead the fifth on that question, it's only natural for us to speculate that given the success of recent [4] ABS offerings from Springleaf and OneMain [5], and given the fact that "other" consumer loan-backed ABS supply is expected to come in at around $30 billion this year, it may be only a matter of time before pools of loans for shoes are run through the Street's securitization machine and sold to investors as a tradable security and on that note, we'll leave you with the following original schematic for tranching loans-for-kicks:
(Note: this assumes that the more expensive the financed pair of kicks, the more creditworthy the borrower)
[6]
