PayPal co-founder continues payments innovation

Max Levchin, a founder of PayPal Inc. and member of the so-called PayPal mafia, a group of Silicon Valley investors and developers associated with the early days of PayPal who went on to create a series of other technology companies, is funding the new online mobile payment startup Affirm. Initially called Expedite, Affirm is the first project launched by Levchin's San Francisco technology company, Hard Valuable Fun. The company said the name was changed to affirm its technology is "a fast, elegant checkout experience."

Authenticating with Facebook

Affirm is an online mobile payment app that allows consumers to make purchases on mobile devices by using their Facebook information at checkout, which serves to authenticate consumers. The company stated it takes just two taps on a mobile device to make an online payment using Affirm: first the user taps the Affirm button on the merchant's checkout page; then the user taps to confirm the order.

Affirm allows consumers 30 interest-free days within which to pay back Affirm at its website, which accepts credit and debit cards from all the major card brands. Borrowers can also mail Affirm checks for payment. There are no consumer fees; merchants are charged for the service.

The company relies on the Facebook profiles of its registered users to authorize credit, but it may ask for additional credit or debit card information to complete a purchase if it cannot glean enough data from the Facebook account. The information gathered from Facebook helps to prevent fraud and deliver payment information, the company said. Affirm added that customers will soon be able to log in using other social media services. Customers must be at least 18 years old to use the service.

Affirm may be downloaded on any mobile device and can be used only with participating merchants. Affirm said its first such merchant is 1800flowers.com. The company also said "a team of cryptographic experts, with years of experience in payments and security" designed the system to protect sensitive consumer and merchant data.

Working to change the world

Levchin and partner Peter Thiel created PayPal in 1998. The company went public in 2002 and was eventually acquired by eBay Inc. In 2004, Levchin founded Slide, a media-sharing service for social networks. Slide was sold to Google Inc. in 2010 for $182 million, and was shut down by Google in 2011. Levchin also helped to start the online social networking and review platform Yelp.

In a recent blog post, Levchin described what he hopes to do with HVF. "It is clear that the path forward for me is to seek that balance of hard, valuable, and fun in every project I start, join, back, or advise," he wrote. "Hard is for intellectual engagement, the search for solution by any means necessary. Valuable is the knowledge that if this, whatever this is, works, the world will never be the same. Fun is the sense of passion, the wings that carry you out of the pit of despair when nothing seems to work; the first thought upon awakening – I've gotta get to the office!"

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