A US buy now, pay later giant run by a co-founder of PayPal has launched in the UK, as its boss sets his sights on the market led by brands like Klarna and ClearPay.
Affirm, which was founded in 2012 by Max Levchin, will start offering its credit options to UK consumers.
It means shoppers will be able to split the cost of a purchase into several payments, with some interest-free deals and other items charging interest.
Mr Levchin, who was one of the founders of PayPal, said there is a gap in the buy now, pay later market for longer-term credit options.
I think lots of places are doing it wrong and we’re very proud that we do it right
Max Levchin
He told the PA news agency: “While the pay-in-four market is reasonably well-served, there’s plenty of consumers who need longer to pay.
“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, which the boss said sets it apart from rivals and will build brand recognition.
Shoppers are also assessed for their ability to repay before having a purchase approved.
“We do not make any money if the consumer is late, by design,” the chief executive told PA.
“I think lots of places are doing it wrong and we’re very proud that we do it right.”
Buy now, pay later borrowers do not have access to some protections provided by other consumer credit products.
However, new rules set to come into force in 2026 will see companies brought under the supervision of the financial regulator in a bid to clamp down on unaffordable borrowing.
Mr Levchin also revealed that Affirm, which has its shares listed in the US, has spent about a year growing a team in the UK and working with the Treasury and regulators.
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.
Poppy Gustafsson, the minister for investment, said the “substantial investment” from Affirm’s launch “will not only help create tech-savvy jobs but underscores the confidence in the UK economy”.
The expansion is being led by 30 staff, with plans to hire more UK-based employees this year.
The firm has initially launched its credit options with flight booking sight Alternative Airlines and payments firm Fexco but is set to target more retailers.
Affirm currently partners with about 300,000 retailers around the world, including Amazon, Shopify and Walmart.
