Affirm, a consumer finance service in San Francisco, has introduced Split Pay, a program that allows online merchants to offer consumers competitive installment-based payments at the point of sale.

Online shoppers can use Split Pay to pay across multiple months while paying a fraction of credit card interest rates, the company said in a July 10 press release. Affirm pays merchants in full at the time of settlement while customers pay monthly installments.

To use Affirm at point of purchase, eTailers can use Celery (trycelery.com) for a turnkey integration as well as with plug-ins for Spree Commerce, Magento, and other major platforms. Affirm charges merchants 2% to 3% of each transaction, and shoppers’ fees start as low as 6% "depending on their payment history, dollar amount being financed, and whether they commit to three, four, or five monthly installments," the company said. The finance fees are built into every payment notice.

This type of financing that used to be available to large firms will now be available "to all online merchants, large and small,” says Affirm's founder Max Levchin, in a July 10 press release. “Consumers want and need an easy-to-use alternative to credit cards when they’re shopping online, especially underserved populations like Millennials, enthusiasts, and the vast population of debit card users.”

Affirm, which recently received  an additional investment round, was founded in 2012 by Levchin, who was also a PayPal founder. Other Affirm founders include Nathan Gettings, co-founder of Palantir, and Jeff Kaditz, formerly Chief Data Officer of gaming company, ngmoco, on the belief that the current credit system based on FICO is outdated. Affirm uses the power of big data to make better, faster financing decisions about shoppers at the point of purchase, while customers provide basic facts such as their name, mobile phone number, and birthday.

Affirm guarantees every payment providing a risk free business transaction for merchants, says Chris Luhur, director of marketing at the online marketplace for secondhand fashion Twice, which is offering Split Pay payment options to its customers. Unlike point-of-sale credit options, Split Pay provides clear terms and a fixed set of payments to ensure consumers are never hit with surprises or the large fees often associated with revolving credit.

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