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?"

Fintech

Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

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Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

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FTA
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.
Enterprise

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

It will be the second re:Invent with CEO Adam Selipsky as leader of the industry’s largest cloud provider after his return last year to AWS from data visualization company Tableau Software.

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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.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

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Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.

Enterprise

Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

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Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

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