Financial technology company Affirm Holdings Inc. AFRM, , which allows consumers to split purchases into installments, has filed for an initial public offering, with plans to list its shares on the Nasdaq. The company argues that it’s modernizing the world of payments by offering an option to make purchases over time without incurring interest for consumers that qualify and “simple-interest” loans for others.
Affirm competes with Sweden’s Klarna, which counts Visa Inc. V, +0.40% as an investor; Afterpay, which trades publicly in Australia; and the more travel-focused Uplift. Affirm’s BNPL products have repayment options spanning from six weeks to 48 months, with an average duration of six months for assets that Affirm retains on its balance sheet.
“With most of the payments industry deriving profits from late fees, overdraft charges, and gimmicks like deferred interest, it’s not hard to agree that there has to be a better way: it’s time to evolve payments again,” he wrote in the letter. The company disclosed in its prospectus that its “0% APR” payment option represented 43% of gross merchandise value facilitated through its platform during the last fiscal year.
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