Affirm and Cash App Are Quietly Redefining Banking

We’ve talked a lot about buy now, pay later and the use cases around it, and the potential disruption associated with it from a credit card perspective.

I want to talk about it in a little bit of a different framework here. The number of debit cards that a lot of these providers now have in the marketplace is becoming problematic.

So Cash App, which is tied to Afterpay, and Affirm, which is primarily a buy now, pay later solution, have over 25 million, almost 30 million debit cards in the ecosystem today.

That’s a real concern over time because not only do they have the debit card, but they have that integrated buy now, pay later capability.

When we think about competitive advantage and differentiation, a debit card that can do buy now, pay later creates another layer of competitiveness. That means potentially folks would be more inclined to put their deposits with somebody like Affirm or Cash App than they would with us because that buy now, pay later capability is built in.

I think it’s important to not only think about buy now, pay later as a potential disruptor for your credit card business and for your loan business, but also the potential now with these growth numbers. Affirm is up 97% in the number of debit cards in the marketplace.

This is a real concern that these debit cards are becoming a very viable competitor to traditional debit products.

Let me know in the comments what you’re doing and how you’re thinking about deposit disruption as it relates to buy now, pay later.