PayPal founder launches mobile payments venture Affirm

PayPal co-founder Max Levchin has launched a mobile payments start-up called Affirm furthering competition in the sector as e-commerce transitions from desktops to smartphones.


Affirm, which is still in beta-phase, is designed to minimise the consumer purchase experience on smartphones with a “two-tap” purchasing system. It has partnered with US firm in pilot mode.

The start-up claims its service can help reduce shopping cart abandonment among retailers’ mobile users.

Affirm's 'two-tap' payments service

“The Affirm payment platform integrates seamlessly into a retailer’s purchase flow, converting impulse shopping into impulse buying and ‘I want’ to ‘I bought’,” reads the Affirm website.

Affirm will guarantee payment to a merchant and then collects from the consumer, with the merchant paying a fee for each transaction, similar to PayPal.

In an interview with All Things D, Levchin says Affirm will use social media profiles to help verify each consumer’s identity and describes the service as a “digital charge card” rather than a credit card.

Other data points Affirm plans to use to help verify identity include the users’ smartphone ID and postcode.

News of Affirm’s launch comes within a week of the UK launch of mobile payments service PayPal Here which lets smartphones receive debt card payments via a remote device.

Other digital pioneers to enter the mobile payments sector include Twitter co-founder Jack Dorsey whose stake in Square is reportedly worth $1bn.

The trend towards m-commerce was highlighted in today’s (27 Feb) Capgemini and IMRG figures showing £7.5bn was spent via mobile devices last year accounting for 12 per cent of all e-commerce sales, up from just 4 per cent in 2011.

Tina Spooner, CIO at IMRG, says: “One-in-eight sales and 1-in-5 visits were through mobile devices in 2012 and conversion rates continue to rise.”

Chris Webster, VP, consumer products and retail, Capgemini, says: “We have seen a clear division in the mobile channels, with shoppers four times more likely to purchase an item on a tablet device over a smartphone.

“The slowdown of sales made on a smartphone suggests there is an issue with the customer experience retailers are offering. If retailers are to reinvigorate the level of adoption, they must recognise the difference in the mobile channels and build specific customer experiences for the smartphone.”

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