Fintech Today - FTT+: Why Affirm Bought Returnly
Hi all, Julie here.
First of all, quick reminder that you can now go to our website and look back/search through all of our previous premium content! New subscribers in particular: you’re welcome ;)
Don’t worry, I have more than just the website to talk about today. A few weeks ago, Buy Now Pay Later startup Affirm acquired Returnly for $300M. Why? Well, returning things isn’t just a pain in the ass for you, it’s a pain for retailers as well as the companies that are processing payments for them.
So not only does this acquisition make sense from that perspective, but Max Levchin, the CEO and Co-Founder of Affirm, is also a Returnly investor. So if his company was gonna buy someone in the space, it was definitely going to be them.
Levchin investing aside, Returnly seems to be running quite the business. It currently serves more than 1,800 businesses and has processed more than $1B in returns, with more than 8M customers having used the platform. And while that’s big, there’s still a ton of room for growth. With the pandemic, ecommerce accounted for 14% of total US retail sales in 2020, or $565B. At the same time, approximately $102B of merchandise purchased online was returned. I’d expect those numbers to go down a bit as the world opens back up, but you get the point: people buy and return a lot online.
You might also have noticed that your payment options at the checkout have been changing. Now it’s more than just a credit card or PayPal option. More often than not, I’m seeing a BNPL option too. So today you have to choose from dozens of credit cards, debit cards, PayPal, Venmo, CashApp, BNPL, and maybe even crypto as a payment option. That’s a lot. Though chances are, you aren’t seeing all of these on every checkout page. Retailers are picking and choosing who they have in the shopping cart based on a variety of things such as cost, checkout conversion, and more.
So with that checkout option getting increasingly competitive, why not try to make this whole process easier so the merchants and customers value working with you as a payment provider over one of the other options that they see on their screen? Seems like a no brainer for someone like Affirm, especially if you don’t want to have to compete your way to 0 on costs.
Affirm: Hey, I can offer you great rates, great customer conversion, and can issue merchandise credits or replacements instantly when customers make a return.
Merchant: Where do I sign up?
You get the point. I’m not an expert on how all of this works, but based on my experience helping with payments for Fintech Today’s newsletter subscription, I think all of this is a lot harder than people realize. If a payment provider said they could handle all of this for me, I’d be very keen on going with them vs someone else. In emerging markets where online shopping isn’t as trustworthy as it is in developed nations, this could have an even larger impact.
Whether in developed markets or emerging, whether you’re selling a mattress or a sweatshirt, adding services like this to your lineup as a payment provider seems like a really smart move. Any way you can change the long term value and customer acquisition costs for a retailer is gonna be huge in winning checkout space.
Julie VerHage-Greenberg is the co-founder of Fintech Today, where she focuses on editorial content and brand. Prior to joining, she was Bloomberg’s first fintech reporter, covering Robinhood from before it was a billion dollar company, breaking the news that Plaid was acquiring Quovo, and interviewing executives on Bloomberg TV and at several large conferences.
Older messages
FTT Update: Call Me the Dogefather
Monday, May 10, 2021
Hi all, Julie here. I tried to watch Elon on SNL this weekend. And by tried, I mean cringed 90% of the time and then turned it off. I usually like SNL, but this episode was just a mess. Sigh. Guess
FTT Update: The Fintech Job Board
Friday, May 7, 2021
Hey everyone, Jordan here. Today is a big day here at Fintech Today. Over the past few months, we've been busy building out our media platform. We've brought on amazing writers, started
FTT Update: Charlie Munger Isn't Buying Dogecoin
Wednesday, May 5, 2021
Hi all, Julie here. I'm gonna keep my intro short since there's a good amount of news to cover today. The only thing I'll say is 1) you should listen to my latest podcast episode with
News From FTT: Website Launch and Free Access to Premium Content!
Tuesday, May 4, 2021
Hi all, Julie here with news that makes me cry happy tears. Our website is finally up! As a bonus, for the next couple of days, everyone will have access to all of our content, premium included!
FTTea with Cokie: Credit Card As A Service, Part Three
Monday, May 3, 2021
Hi y'all, Cokie here. Welcome back to part to of our series on "Credit Card As A Service." In part one, I gave an introduction to credit cards, including terminology and history (did
You Might Also Like
Wall Street’s ‘tech wreck’
Friday, April 19, 2024
Bloomberg Evening Briefing View in browser Bloomberg US equities sold off sharply on Friday, sending tech stocks to their biggest weekly loss in 17 months. The S&P 500 closed down 0.9%, dropping
📺 Investors paused on Netflix
Friday, April 19, 2024
Netflix did good, but it wasn't enough for investors | The UK's latest results could throw the central bank off | Finimize TOGETHER WITH Hi Reader, here's what you need to know for April
Decisions Nobody Made
Friday, April 19, 2024
Dan Davies Introduces His New Book. Plus: Earnings Season! ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Harry's Rant 4-19-24 Stocks Face Headwinds
Friday, April 19, 2024
image Harry's Rant April 19, 2024 Stocks seem to be facing headwinds due to bond yields. Is this creating a top? Harry Dent discusses the roles of market divergences, gold, and Bitcoin in
Do You Own Any Of These Stocks?
Friday, April 19, 2024
The following is a third-party sponsored message. It should not be considered a recommendation or endorsement by HS Dent Publishing. logo Book image Fellow Investor Our proprietary research has
Blame it on the rent
Thursday, April 18, 2024
Bloomberg Evening Briefing View in browser Bloomberg When US inflation peaked above 7% back in 2022, the culprits were everywhere—spread across goods and services. Now, with inflation back below 3%,the
🇮🇳 It's all about India
Thursday, April 18, 2024
Chipmaker TSMC didn't have much to complain about | The US dollar has the world talking | Finimize TOGETHER WITH Hi Reader, here's what you need to know for April 19th in 3:14 minutes. 🪙
Home makeover on a budget? We have just the thing.
Thursday, April 18, 2024
Lower rates and potential value boost — get started. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Mother Earth 🤝 Jane Fonda
Thursday, April 18, 2024
Plus, a new worksheet for stay-at-home moms. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Visionary Valuations - Issue #464
Thursday, April 18, 2024
From AI enhancements to fintech revolutions, uncover the potential of next-generation financial technologies. April 18, 2024 FinTech Weekly cuts through the noise to bring you insights on how