Affirm Holdings Inc. is joining the ranks of fintech companies vying for “super-app” status as the company plans a series of feature introductions that will broaden its platform beyond buy-now pay-later capabilities.
Fintech companies in the U.S. are increasingly trying to follow in the footsteps of Chinese players like Alipay, combining payments with a host of other financial features in so-called super-apps. PayPal Holdings Inc.
has been vocal about its super-app ambitions, and Square Inc.
has also been looking to beef up its Cash App mobile wallet with a deal for Affirm-rival Afterpay Ltd.
Through an investor presentation late Tuesday, Affirm
outlined similar aims as it rolled through a series of feature enhancements in the works. Chief Executive Max Levchin said Affirm has nearly 1 million people on the waitlist for its debit card that will make it easier for people to split in-store payments into installments, and the company sees opportunity to add other functions to the card over time.
The company is also piloting a cash-back program that will offer rewards to customers, and it’s planning a crypto product that will let people own digital assets in Affirm savings account. The Affirm super-app will combine the “best of Affirm’s commerce, payments and financial services,” Levchin said in the presentation.
Though Affirm shares fell 1.5% in Wednesday trading following the presentation, the announcements won praise from analysts, including Daniel Perlin of RBC Capital Markets, who wrote that Affirm presented “a roadmap to unbundle credit cards.” He highlighted that while Affirm hasn’t factored the debit product into its previously issued forecast, since the card is still in beta mode, the company expects meaningful contributions from it during fiscal 2023 as the debit card helps it capture more everyday spending.
Perlin rates Affirm’s stock at outperform with a $130 price target.
DA Davidson analyst Chris Brendler kept a neutral rating on Affirm’s stock after the presentation, though he noted that he “came away considerably more bullish.” The debit product is “truly unique” and “better than a debit card,” he wrote, while other new developments like brand-sponsored promotions and “adaptive” checkout options that aim to deliver more personalized payment choices.
“The ability to take balance-sheet risk is helping AFRM win despite increasing competition, and its technology is an underestimated competitive advantage,” he wrote. “Combined with Amazon and new revenue streams like Debit+ and advertising, our estimates rise significantly, but with the choppy markets, we think we can get a more compelling entry point.”
Affirm shares are up 70% over the past three months as the S&P 500
has risen 1.6%.