A US rival to Klarna in the buy now, pay later market has set up in the UK to fill a gap it says for longer-term credit.
Affirm, founded in 2012 by Max Levchin a co-founder of PayPal, believes many of the current providers are doing it wrong.
“While the pay-in-four market is reasonably well-served, there’s plenty of consumers who need longer to pay,” he told PA.
“So longer-term products like six, nine, or 12 months are valuable, especially for more considered purchases… if you’re buying a couch, or a fridge, or a household appliance, it doesn’t help very much to have a very short repayment plan.”
Affirm does not charge fees for consumers who do not make payments on time, he added.
“We do not make any money if the consumer is late, by design,” the chief executive told PA.
New rules due to come into force in 2026 will see the BNPL sector come under the remit of the FCA for the first time and Levchin has been working with the Treasury and regulators for a year ahead of its entry into the UK market.
It comes a week after Chancellor Rachel Reeves unveiled her first autumn Budget, in which she promised to bring more investment into the country to help grow the economy.
Affirm currently partners with about 300,000 retailers around the world, including Amazon, Shopify and Walmart and is looking to partner with UK businesses.
BNPL is likely to come under even greater scrutiny if Swedish giant Klarna completes an initial public offering in the first half of 2025, as some of its backers have suggested is the timeline.
As well as giving it a valuation, it would allow external investors to have a proper look at the business model of a BNPL market leader.