Do you ever feel cheated when caught off guard by hidden fees and complicated terms in “buy now, pay later” services?
Let’s look at Splitit and Affirm, two big names changing how we pay later. This article compares them so you can see what they’re all about. And trust me, it’s worth your time.
Whether you’re buying or selling, knowing these two can make things easier. Now, let’s get to know them face-to-face –
Splitit Overview
Did you know? Splitit is a platform that allows you to purchase in installments using your existing credit card. Merchants who utilize Splitit can offer card-attached installments to their customers, enabling responsible shopping without additional debt, interest, or hidden fees.
For the shopper, the purchase process works by taking the first installment upon purchase (or possibly later if goods are being shipped later), then the rest of the monthly installments are automatically taken out on the same date as the first. Note that this date cannot be changed.
Here’s something interesting: Splitit differentiates itself from the conventional “buy now, pay later” services by allowing you to leverage your existing credit to make payments in a way that works better for them.
Another benefit is collecting rewards or cash back on the purchase without paying interest or fees beyond what your issuer charges. But that’s not all. Let’s have a look at some of its key features –
Splitit Features
Some key features of Splitit include:
- Flexible Installments: Splitit offers customers the ability to pay for their purchases in up to 24 monthly installments using their existing credit card.
- No Hidden Fees or Added Interest: Unlike many other “buy now, pay later” options, Splitit doesn’t charge buyers additional interest or fees.
- Integration with Existing Credit: Splitit allows customers to use their already available credit and split payments without incurring new interest.
- Full Payment to Merchants: With its funded model, Splitit pays merchants the full transaction amount when a shopper orders.
- White-Label Solutions: Splitit’s Installments-as-a-Service platform offers a merchant-branded experience to drive installment payments.
- Buyer Portal: Customers can access and control their Splitit payments through a convenient online shopper portal. Now, let’s switch gears and introduce you to Affirm.
Affirm Overview
Affirm is revolutionizing the financial industry with credit services that prioritize customers, transparency, and usability.
Whether a customer needs more flexible payment plans or a business owner looking to grow their customer base with a BNPL option, Affirm offers an all-encompassing solution that benefits all its users.
To learn more about Affirm, here’s a detailed comparison of Affirm with the likes of Katapult, Afterpay, and Klarna.
Splitit vs Affirm: Approval rates
Splitit
Splitit utilizes a customer’s existing line of credit courtesy of their credit card, meaning there is no need for an additional approval process. But how does this benefit you?
If a customer’s credit card has sufficient credit for the purchase, they can use Splitit, as long as it is a Visa or Mastercard.
Thus, from an approval standpoint, Splitit has a higher “approval rate,” as it doesn’t subject customers to a separate or additional approval process.
Affirm
Affirm requires an approval process, which includes a credit check. Customers provide personal details during the application and get a real-time credit decision.
Their credit score, amongst other factors, determines whether they will be approved, the interest rate, and their credit limit.
Given the requirement for a credit check, Affirm’s approval rate depends on the customer’s creditworthiness, and some applicants are denied. But don’t worry, there’s a solution.
Check this guide to getting your Affirm card approved.
Splitit vs Affirm: Partners and Retailer network
Splitit focuses on creating partnerships across various sectors, including retail, healthcare, and travel.
Given their operation model, they can be utilized anywhere Visa and MasterCard are accepted, providing a vast network of potential applications but not necessarily equating to direct partnerships.
On the other hand, Affirm is recognized as a leading Buy Now, Pay Later (BNPL) solution in the United States and has fostered partnerships with numerous vendors.
Businesses of all sorts, ranging from small businesses to some of the most popular global brands, are known to offer Affirm as a payment method.
Now, let’s dig a little deeper and find the security measures in place to protect your data.
Splitit vs Affirm: Security Measures
Splitit:
- Splitit complies with global payment card industry data security standards (PCI DSS), ensuring all credit card information is stored safely and securely.
- Their website also opts for Secure Sockets Layer (SSL) encryption, ensuring secure data transfer between their server and your browser.
- Splitit does not access or divert from existing credit card limits. It uses the standard and secure authorization and capture processes that credit cards offer.
Affirm:
- Affirm also adheres to the PCI DSS regulations, ensuring all customer data is securely stored and managed.
- Affirm secures its website and app with encryption and continuously monitors its systems for vulnerabilities.
- Before making a transaction, Affirm requires customers to confirm their identity with a secure PIN sent via text to a registered mobile number. Only when a customer authorizes a purchase Affirm pays the merchant on behalf of the customer.
Splitit vs Affirm: Interest/Fee structure
Splitit and Affirm, both “buy now, pay later” options, have different interest and fee structures.
Splitit: With Splitit, customers have no added interest or fees. Customers use their existing credit card and pay whatever their credit card issuer charges them.
As long as the customer makes their payments on time, they won’t incur any additional interest beyond what their credit card typically charges.
Affirm: Affirm offers a more traditional financing approach with interest rates ranging from 0% to 30% APR. When customers choose Affirm, they go through a credit check and are either approved or denied based on their creditworthiness.
Depending on the merchant, you might be offered a 0% interest rate or a higher rate depending on various factors, including your credit score.
Splitit vs Affirm: Flexibility and Conditions of Payment Plans
Splitit:
- Range of Installments: Customers can pay in up to 24 equal monthly installments – the merchant generally decides the number of installments.
- Credit Card Utilization: Splitit freezes the entire amount on the shopper’s credit card to ensure that later installments can be charged. As each installment is billed and paid, a proportionate part of the total amount is unfrozen on the credit card.
- Late payment: As for handling late payments, this would depend on the credit card issuer’s policies, as payment plans are assigned to customers’ existing cards.
Affirm:
- Range of Installments: Affirm payment durations typically range from 3, 6, or 12 months, extending up to 48 months for larger purchases at some retailers.
- Interest & Fees: The APR can range from 0% to 30% depending on the customer’s creditworthiness and the merchant.
- Late Payment: Affirm does not charge late fees. However, a late payment may affect your ability to use Affirm in the future.
Splitit vs Affirm: Late Payment Policies
Splitit and Affirm have different approaches to late payment policies since they operate on different models and payment structures.
Splitit:
Splitit doesn’t impose late fees or penalties upon customers directly, using a customer’s existing credit card to make payments. The credit card issuer determines late payment policies.
If a customer misses a payment or pays late, they could incur late payment fees or interest charges, according to their credit card agreement. Customers need to understand their credit card agreements and the policies regarding late payments.
Affirm:
Affirm emphasizes that they charge no late fees. If a customer fails to make a payment or pays late, Affirm won’t charge extra fees.
However, late or missed payments can harm your credit score and may affect your ability to use Affirm’s services in the future. Affirm expects you to contact them if you encounter issues with making payments so they can find a suitable solution.
Final Verdict
Now that we’ve looked at Splitit and Affirm, it’s easier to see which might be better for you.
Splitit uses your credit card and doesn’t add extra costs. Affirm has a more usual pay-later style with different interest rates.
It’s your turn to pick the one that fits your shopping style and budget.
