PayPal Co-Founder Re-Enters the Payments Sector With Affirm, His New Startup

Affirm Express Checkout Payments Solution from PayPal Co-Founder Max Levchin

Max Levchin, the co-founder of PayPal and high-profile Silicon Valley entrepreneur, has stepped back into the world of online and mobile payments once again with his new company Affirm.

Having left Google in 2011, after he sold his last company – Slide -  Levchin has been hard at work on his new project, Affirm, through his incubator company Hard, Valuable Fun (HVF).

Levchin isn't a fool though, he won't be wading in against his own giant creation PayPal, nor will he be going directly toe-to-toe with other successful market competitors such as Square or Stripe. In fact, he's actually using Stripe to process the back end of Affirm due to being an investor in the company.

Instead, he's focused on providing a payment solution for another layer of the retail and consumer world – one that PayPal, Square and Stripe wouldn't necessarily aim for – by turning mobile browser users into shoppers by reducing the need to ever take a credit card out or fill out a form. Just press a button and the transaction is complete, no matter what website you're on.

It works on a similar model to a credit card, requiring users to settle their balance 30-days later when back at a desk or near a bank – and not running around making purchases online.

Retailers will pay Affirm a fee, but it ensures that they get the money from each transaction before the user has made the payment to Affirm, thus providing a hopefully tantalising opportunity for more digital business.

To make things far easier for consumers, Affirm will use Facebook for authentication purposes alongside other social and data measures to assess risk.

Levchin decided to arrive back into the world of payments due to feeling that the space had really not evolved enough since his departure from PayPal.

"Payments online are still too hard — we started the revolution with PayPal and democratized payments for small businesses, but we stopped short of changing the system," he said to All Things Digital. "The world is now awash in data and we can see consumers in a lot clearer ways."

He also went on to say that the "overwhelming transformation of everything toward mobile changes all the fundamentals."

Is Levchin's return to the payments space a welcome one?

Do you think the can innovate mobile payments in the same way he changed online payments with PayPal?

Let us know by leaving a comment below.


For all things cards and payment related, especially concerning new technologies and ideas within the payments space, take a look at Cards and Payments Africa 2013 where the future of payments is discussed.

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