Americans shopping online after midnight often make riskier transactions and are more likely to default on their loans, according to Affirm Chief Financial Officer Michael Linford.
The fintech firm uses the hour a consumer attempts a transaction as a key data point to help determine whether to approve loans, Linford told CNBC in a recent interview.
Other factors include a user's repayment history with Affirm and transaction data from credit bureau Experian.
Shoppers could be inebriated or under financial or emotional duress and desperately seeking credit, Linford said.
The buy now, pay later industry offers installment loans that typically range from no-interest short-term transactions to rates as high as 36% for longer-term credit.
Persons:
Michael Linford, Linford, Max Levchin
Organizations:
CNBC, PayPal