how does Affirm make money?

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I’m seeing Affirm in lots of places lately as a way to pay the same amount of money for your purchase but over installments with zero interest. How do they make money? My only guesses are a kickback in the seller’s end or they’re selling user data. Anyone know?

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They specialize in people who won’t pay back before the 0 interest period is over and if you go over you owe all the interest from day 1 and it is a high rate.

If the consumer isn’t paying interest, presumably the retailer is paying them a fee instead. Not that different from paying a credit card company a processing fee. It’s a fee worth paying for retailer because most of those sales are marginal sales that otherwise would not take place (so better to have slightly lower margin than no margin at all).

Businesses like this have two main revenue streams, from two different “products”.

The first stream is the one you see – the loans. For Affirm, some loans *do* have interest, which means you pay them for it. For other companies, they impose hefty late fees and such if you don’t pay on time.

The second stream is one you don’t directly see – kickbacks from businesses, like you figured. Whenever you make a purchase using one of these services, the seller pays them for it. The idea is that most of the sales wouldn’t have happened without the loan, so it’s still more money for the business.

most zero interest schemes use hidden fees, also they use the coupon concept to get people to try the next high profit sugar bar or drink in a deal with the store, or say get you a device that requires or encourages a subscription.

zero interest ends the interest rates are ridiculous. they(and all banks and credit cards) expect a certain percentage of people not to make payments on time and the creditor will profit heavily from late fees.