Fintech

Affirm is taking aim at ‘fly now, pay later’ as travel bounces back

The pandemic delayed the "buy now, pay later" company's expansion plans. But it now sees a big opportunity in travel.

A fly now, pay later boarding pass

Tickets are typically bought with credit cards. That makes travel ripe for "buy now, pay later" disruption.

Image: Christopher T. Fong/Protocol

The pandemic derailed Affirm's big push into the next hot space in "buy now, pay later": travel.

"We spent 2019 really figuring out what it would take to bring Affirm to travel," Affirm CEO Max Levchin told Protocol in June. "2020 was supposed to be the year of travel. Of course, 2020 was not the year of travel for anyone. Travel basically fell off a cliff."

But travel has bounced back. Affirm has accelerated its "fly now, pay later" offensive, which took a big step forward Wednesday with a new partnership with American Airlines.

The move underlines how travel — which Levchin said was already "a standout" in Affirm's business — has grown in importance to the company. But some analysts say the company, which is a top player in the $100 billion "buy now, pay later" credit market, faces stiff competition in an arena where consumers now enjoy a broader range of payment options.

Affirm has formed partnerships with travel companies, including Expedia, Priceline and Delta Vacations. The American Airlines deal is the company's first pay-later partnership with a major airline, said Geoffrey Kott, Affirm's chief revenue officer.

Eligible travelers will be able to book airfares of $50 or more on American and have payment options from three to 12 months with fixed interest ranging from 10% to 30%, with no late payment penalties. "Consumers never owe a penny more than what they agree to at checkout, even if they're late missing payments," Kott told Protocol.

Geoffrey Kott, Affirm Chief Revenue Officer Geoffrey Kott said the American Airlines deal is the company's first pay-later partnership with a major airline.Photo: Affirm

Alex Johnson, fintech research director at Cornerstone Advisors, called the American Airlines deal a "good win for Affirm."

Affirm hasn't "done much in air travel before this," Johnson told Protocol. "I'd expect Affirm to try and expand its presence in the space now that it has this win."

He said "the airline industry has been a bit under-penetrated by the big BNPL providers so far."

Uplift, a smaller BNPL company, specializes in travel, with 17 airlines listed as partners on its website. Wall Street giants like American Express and Goldman Sachs, through its Marcus digital bank, have made big moves into pay-later travel.

Melody Brue, principal fintech analyst at Moor Insights & Strategy, said that while the American Airlines deal gives Affirm an edge over rivals like Klarna and Afterpay, it is also entering a space where major credit card companies are already "offering their version of BNPL" and where " consumers have so many choices with payment methods they may already be using," she told Protocol.

Johnson said BNPL financing in travel can also be complicated in one key area: cancellations and refunds. BNPL providers are typically able to work with merchants to facilitate returns and exchanges, he said, but those are typically for hard goods. Airlines have different policies around whether tickets can be refunded.

"Airlines present some unique challenges in this area," Johnson said. "You have standard cancelations, which are somewhat analogous to returns, but you also have flight changes, switching fees, rebookings, etc. How do BNPL providers handle all of these?"

Entertainment

Niantic is building an AR map of the world

The company’s Visual Positioning System will help developers build location-based AR games and experiences; a new social app aims to help with AR content discovery.

VPS will allow developers to build location-based AR experiences for tens of thousands of public spaces.

Image: Niantic

Pokémon Go maker Niantic has quietly been building a 3D AR map of the world. Now, the company is getting ready to share the fruits of its labor with third-party developers: Niantic announced the launch of its Lightship Visual Positioning System at its developer summit in San Francisco on Tuesday. VPS will allow developers to build location-based AR experiences for tens of thousands of public spaces, Niantic said.

Niantic also announced a new service called Campfire that adds a social discovery layer to AR, starting with Niantic’s own games. Both announcements show that Niantic wants to be much more than a game developer with just one or two hit apps (and a couple of flops). Instead, it aims to play a key role in the future of AR — and it’s relying on millions of Ingress and Pokémon Go players to help build that future.

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Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

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Workplace

Why it's time to give all your employees executive coaching

In an effort to boost retention and engagement, companies are rolling out access to executive coaching to all of their employees.

Coaching is among personalized and exclusive benefits employers chose to offer their workforce during the pandemic.

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Tech companies know that in order to stay competitive in today’s still-hot job market, it pays to offer more personalized and exclusive benefits. Chief People Officer Annette Reavis says Envoy, a workplace tech company, offers all employees access to a broad range of opportunities. “We offer everyone an L&D credit that they can spend on outside learning, whether it's executive coaching or learning a new coding language. We do this so that people can have access to and learn skills specific to their job.”

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Enterprise

Microsoft thinks Windows developers are ready for virtual workstations

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Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

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In an interview with Protocol, Okta CEO Todd McKinnon said the cybersecurity firm could’ve done a lot of things better after the Lapsus$ breach of a third-party support provider earlier this year.

From talking to hundreds of customers, “I've had a good sense of the sentiment and the frustrations,” McKinnon said.

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Okta co-founder and CEO Todd McKinnon agrees with you: Disclosing a breach that impacts customer data should not take months.

“If that happens in January, customers can't be finding out about it in March,” McKinnon said in an interview with Protocol.

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Kyle Alspach

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