Merchant-Supplied Billing and Shipping Addresses

Overview

Billing and shipping addresses are important factors in Affirm’s processes for credit approval and fraud prevention. When merchants provide these addresses, it helps streamline approval and reduce disruptions during checkout. Without this information, Affirm may need to rely on other methods, which can lead to delays and additional steps for the customer. Providing accurate address details helps increase approval rates, reduce verification steps, and lower potential risks, contributing to a smoother overall experience for both merchants and users.

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Billing Address

Affirm uses the billing address as an integral factor in its credit approval process. The billing address helps match the applicant’s information with credit bureau records. The merchant typically provides a billing address that aligns with the credit bureau’s records, ensuring a more efficient verification process. If the merchant doesn’t provide a billing address, Affirm retrieves one using the applicant’s name and date of birth through a third-party service (TLO). If the TLO method succeeds, Affirm submits the address to the bureau. Otherwise, the customer must manually provide an address.

Merchants who provide the billing address during checkout see higher approval rates for new users than merchants who don't. The billing address is sent to Affirm using the billing object in the Checkout API. Without this information, the approval process requires additional steps, causing delays and negatively impacting the customer’s checkout flow.

The likelihood of step-ups, where customers are asked for additional personal information, is significantly higher when billing addresses are not provided. This extra step creates friction for customers in the checkout process, with step-up rates nearly doubling for both new loan and identity users.

The following metrics show the step-up rates for new loan users based on whether the billing address is provided:

• 8% without the billing address.
• 4% with the billing address.

Relying on external methods to retrieve addresses highlights the importance of merchant-supplied billing data in creating a more efficient and streamlined customer experience.

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Shipping Address

The shipping address is another important part of Affirm’s fraud system. One of the best predictors of fraud risk is when a shipping address doesn’t match the billing address.

When a merchant doesn’t provide shipping addresses, Affirm’s fraud system requires additional time during onboarding to learn the merchant’s risk levels. During that time, the system assumes the merchant is more risky and penalizes the merchant until the model is retrained, which occurs once a year on average. For scenarios where an item is not shipped, such as ticketing or travel, we instruct the merchant to provide additional data to avoid shipping address issues.

When a merchant doesn’t provide a shipping address:

• New users encounter a step-up about 50% more often.
• Return users encounter step-ups about 80% more often.

By providing a shipping address, merchants can save their customers significant time and effort.