First second and third place podiums
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The five-minute guide to who’s winning in ‘buy now, pay later’

Protocol Fintech

Hello and welcome to Protocol | Fintech! This Tuesday: Who wins the "buy now, pay later" mashup, the money behind income share agreements, and Monzo pulls its banking application.

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The Big Story

"Buy now, pay later" is the biggest change happening now in consumer credit, payments and shopping. So Protocol | Fintech took a deep dive into the industry.

Our latest manual includes my explainer on the industry's rapid rise, Ben's revealing interview with Affirm's Max Levchin, the 10 people you need to know in the business, the five major trends to make you an instant expert and the fast-arriving impact of regulation.

But if you need a quick guide, there are three companies you need to know. Affirm, Afterpay and Klarna are ferociously battling for shoppers' wallets, retailers' checkout pages and investors' dollars.

A local phenomenon has turned into a global brawl. Klarna, originally from Sweden, is the largest in the sector globally. But with many local players across different markets, there's still intense competition in many markets, from Colombia to Nigeria.

  • Klarna has 90 million global active users, 2 million transactions a day and 250,000 merchants globally. It's now growing quickly in the U.S.
  • Affirm, run by PayPal co-founder Max Levchin, has 7.1 million active shoppers in the U.S. and is just starting to plan its global expansion. But it's landed several big merchant deals, from Peloton to Shopify to Amazon.
  • Afterpay, which has agreed to sell itself to Square, has 10.5 million users. When its deal with Square closes, it will get an immediate boost in merchants and shoppers, with Square's popular Cash App becoming Afterpay's ecommerce app.
  • PayPal just agreed to acquire Japan's Paidy, which gives it an advantage in a large market in Asia.

Big-ticket items are a big challenge. Affirm's strategy has been to go after more expensive items through deals with companies like Peloton, which gives it a leg up on competitors.

  • Even after Monday's tech-stock pummeling, Affirm, which went public this year, is worth $29 billion. That's in shooting range of Klarna, whose most recent private valuation this summer was $46 billion, and the same price Square agreed to pay for Afterpay.
  • Bigger deals typically include interest, while smaller purchases — the classic "pay in four" or "pay in six" deals — most often don't.
  • Larger "buy now, pay later" purchases are more complex to underwrite and finance, which provides Affirm with something of a competitive moat. Expect Klarna and Afterpay — which will soon have access to Square's risk team — to try to sap that advantage.

There really is an app for that. Merchant deals are a good way for "buy now, pay later" providers to get their name out. But the long game is a direct relationship with consumers — and that often takes the form of a do-everything super app.

  • Affirm, Afterpay and Klarna are pushing apps where consumers can buy from a range of merchants, regardless of whether the pay-later company has an agreement with them. Affirm said 30% of its transactions come direct from its app.
  • Shopping is just the beginning. Klarna already offers bank accounts in Germany. Affirm has plans to launch a debit card and let consumers buy and sell crypto. It's a move out of the PayPal playbook: If you hold a balance somewhere, you're all the more tempted to spend it.
  • But moving into app territory is where the competition gets tough. PayPal's had an iPhone app since 2008, and it also owns Venmo. Visa and Mastercard want to help their bank partners bake installment payments into credit cards. And Apple, the App Store's landlord, has its own reported "buy now, pay later" ambitions. It's hard to compete with the company that makes the phone's own wallet software.

The competition is ferocious, and sometimes confusing. But the stakes are no less than control over the future of payments and shopping. If you want to learn more, read our in-depth manual.

— Tomio Geron


Investment banking firms that fully implement CRM technology are flourishing. Banks that can effectively leverage their network have a huge advantage at both sourcing and executing deals. Learn how you can do the same.

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From Protocol | Fintech

The financial system behind income share agreements. Fintech lenders and regulators don't agree on whether income share agreements are loans. But Wall Street sees a big opportunity nonetheless.

Google ditches banking product. The accounts, which were once a big part of its fintech plans, connected to banks such as Citi.

Protocol Event

The Inside View with Bill McDermott: ServiceNow is quickly becoming one of enterprise technology's most well-known names. Protocol | Enterprise's Joe Williams talks to its CEO to learn what's ahead for the company and how it plans to hit $15 billion in annual revenue. Join us on Oct. 12 at 10 a.m. PT / 1 p.m. ET. RSVP here to reserve your spot while space is available.


  • "Or more simply put: AWS for crypto." Coinbase CEO Brian Armstrong on the company's new crypto infrastructure offering, Coinbase Cloud.
  • "We have seen traditional institutions that embrace diversity and inclusion and walk the talk. And we see startup fintech firms that do not."Radar CEO Jane Loginova on the need for the push for diversity to come from the top.
  • "Is it just me or does the super app strategy feel a bit forced?"Alex Johnson, fintech research director at Cornerstone Advisors.

3 Questions With …

Nora Apsel, CEO, Morty

What fintech trend are you most excited about?

I think the rise of embedded data security within fintech is exciting and important. There are great identity verification and KYC companies solving for data security issues by building products that are easily embedded within different fintechs. I'm looking forward to seeing how this trend continues to evolve, as there's so many ways that these integrations can be compounded over time to create stronger layers of security.

What fintech trend is most troubling for you?

Fintech has created so many amazing tools for investing and managing personal finances. That said, there's still a lack of education that exists in the space, which makes it difficult for users to make well-informed, responsible decisions that serve their long-term goals. As someone who spends a lot of time thinking about how to help people navigate one of the biggest financial decisions of their lives, I think there is a need for more upfront education around potential risks in many areas.

What fintech company have you been most impressed with this past year?

I've been really impressed by Policygenius. They offer the ability to seamlessly shop around for various types of insurance products (i.e., life, car, home) while providing a consistent level of service. Similar to mortgages, obtaining insurance can be very confusing and difficult to navigate, so I've been impressed by the unbiased tools they've created to help consumers figure out exactly what kind of insurance they need and sort through all the jargon.

Need to Know

Making Moves

  • Sheila Patel has joined Antler. The Goldman Sachs veteran who is also vice chair of B Capital Group has joined the board of the venture capital firm. Antler's portfolio includes several fintech and proptech startups.

Deal Flow


In recent years, CRM technology has evolved. What was once a contact storage tool is now the driving force behind leading financial firms. Relationship intelligence means fully leveraging your bank's collective network. Get intros to more sellers, stay in front of more buyers, and never worry about nurturing your important relationships.

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Data Point


That's the surprisingly high percentage of millennials who still use paper checks to pay their rent, according to a PYMNTS report.

Thanks for reading — see you Friday!

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