PayPal Co-Founder Levchin Launches New Payments Startup, Affirm

“We are trying to get as close as possible to one-click, which has always
been the case on the desktop,” said Levchin in an interview today. “In
mobile, it has become an imperative to be able to buy it now or you lose a
customer quickly.”

Levchin described Affirm as a digital charge card rather than a credit
card, trying to be valuable to merchants by lowering the abandonment rate
of mobile transactions. Affirm’s beta launch partner is 1-800-Flowers.

“You will essentially be putting a purchase on a digital tab, and we are
going to make it work for us by looking at all available data to determine
if you are someone who will pay it back,” said Levchin.

Like an American Express or other charge card, consumers will have about 30
days to settle bills, although Affirm will not be making any money from
them.

As to why he decided to enter the increasingly competitive online payment
space — which is also rife with regulatory and fraud issues — Levchin said
that his efforts at PayPal did not go far enough.

“Payments online are still too hard — we started the revolution with PayPal
and democratized payments for small businesses, but we stopped short of
changing the system,” he said. “The world is now awash in data and we can
see consumers in a lot clearer ways.”

In addition, he added, the “overwhelming transformation of everything
toward mobile changes all the fundamentals.”

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