A new startup from PayPal co-founder Max Levchin, named Affirm Inc., has created a new kind of credit card that does not use plastic.
The new credit card created by Affirm Inc. only exists online. People are able to sign up for the new credit at the website or at checkout on some web stores financing from Affirm, which will then be paid off in monthly installments.
According to the company, the new micro-lending program will be made available through Apple Pay, letting customers use their iPhones to make payments at any physical store.
The San Francisco-based company states that they offer better services than traditional credit cards because of their transparency about the fees and charges for the usage of the new payment system on purchases from more than 150 retailers.
Levchin was quoted as saying “from the beginning, our mission at Affirm has been to provide financial products. Affirm’s products are directly serving this growing need in a way no other company has, and I believe we will continue to stand out from the crowd as consumers demand financial products and services that help improve their own financial lives.”
It remains to be seen if this new payment system will indeed be replacing traditional credit cards when it’s still outside of the radar of the U.S. credit card market. However, Affirm remains confident that people will be patronizing this new mode of payment as it provides a separate financing option for major transactions.
“I’m optimistic there will be a day when shoppers instinctively reach for their phone and the Affirm app, rather than their credit card,” Levchin said.
Affirm’s new payment system offers no credit score requirements and consumers will run the credt spectrum. According to a spokeswoman, Affirm pays the store up front and it can afford to do so because it uses an underwriting method that looks at a wide array of credit data and other information to gauge a customer’s risk of defaulting.