This week’s tech disruption – Affirm Holdings Inc (AFRM) and UBER Technologies Inc. (UBER)

Buy Now Pay Later

If you are not familiar with this term, buy now pay later (BNPL) is a type of short-term financing that allows consumers to make purchases with a payment schedule that works for the consumer. The BNPL model is becoming increasingly popular especially when shopping online.

Affirm Holdings Inc. is in the buy now and pay later space and provides options for consumers to pay for their vacations, fashion, technology with predictable payment arrangements often interest free. Compare that to a more traditional approach using a Visa or Mastercard at +19% interest and costly minimum repayment features that can keep consumers in debt for an indefinite period.

Large merchants such as Expedia, Walmart, The Bay and many others who adopt Affirm’s technology into their own e-commerce platforms, do not actually take on defaults should the consumer default on their agreed upon payment arrangement. In exchange for this risk trade off, the merchant gives up a portion of their margins to Affirm which is one of many ways the company generates revenue. The belief is that you can sell more products or services when you can offer a transparent and flexible payment solutions therefore the margin reduction is worth the consideration – more so if the business can reach scale.

The Opportunity

Affirm’s business model is directly aimed at the $8 trillion-dollar global payments market so there is plenty of room for disruption and competition including Apple who recently announced they would build out Apple Pay to accept monthly payments on purchases.

Super Uber

Can Uber be the one application to rule them all? Uber Technologies Inc seems to be working towards that goal.

When you pop the hood and peek inside Uber’s service offering, you can’t help but to be excited for the future. The company is in the ride, food, pharmacy, Costco, grocery, liquor, package delivery business which also includes transit and freight services. I would not be surprised if Uber could one day create their own exchange for crypto-currency and other investment securities.

“We absolutely are looking at building a super app,” Dara Khosrowshahi, CEO of UBER Technologies shared on CNBC this week. Dara highlighted the momentum their technology is generating by stating the following, “These are apps that provide all kinds of services to the consumers, are incredibly sticky and those businesses have incredibly market caps.”

These are apps that provide all kinds of services to the consumers, are incredibly sticky and those businesses have incredibly market caps.” – Dara Khosrowshahi, CEO of Uber Technologies Inc.

If you can see past driver/worker shortages, variants and other challenges that is keeping the global economy from fully reopening, UBER Technologies might be worth the consideration.

What is this week’s takeaway?

Technological advancements in artificial intelligence, point of sale & e-commence eco-systems, super applications, decentralized finance, bioscience and genomics, autonomous vehicles, space travel, cryptocurrency, blockchain technology, cloud computing, cyber security, and clean energy is creating an incredible era to be both a consumer and investor. Yet on the surface, for the average investor, this magnitude of technological advancement can be overwhelming and could lead investors down a path of complacency.

Keep yourself informed and use the resources you have in place to help you make good decisions with your money.

Have a great weekend!

Talk soon,

Michael