Affirm has joined JPMorgan Chase’s payments network, expanding the reach of its buy now, pay later services to millions of additional U.S. retailers. Just last month, Klarna, a key rival in the burgeoning BNPL market, secured a similar deal with JPMorgan.
The competition between the two providers is intensifying as more consumers turn to BNPL as an alternative to credit cards. Notably, Klarna replaced Affirm as the BNPL provider for Walmart just last week.
“It’s evidence of the hyper-competitive marketplace for BNPL right now,” said Ben Danner, Senior Analyst of Credit and Commercial at Javelin Strategy & Research. “Affirm and Klarna are each trying to be the primary BNPL vendor for consumers. JPMorgan has one of the largest merchant networks out there, so partnering with them will get Affirm visibility in front of millions of consumers at the point of sale.”
A Booming Market
According to Javelin’s 2024 North American PaymentsInsights report, more than 30% of U.S. adults had used BNPL services in the past 30 days. Affirm reported 21 million active consumers last year, reflecting a 23% year-over-year growth. However, this still trails behind Klarna, which claims over 37 million users in the U.S. alone—its largest market.
Affirm’s latest move positions it as a challenger to Klarna, which is gearing up for its U.S. IPO. The Swedish fintech has already established partnerships with several major global processors. Prior to its recent collaboration with JPMorgan, Klarna teamed up with Worldpay last October and has also forged similar agreements with Adyen and Stripe.
The Benefits of Affirm
Affirm touts its customer service as a key differentiator from competitors. Through its new partnership, any merchant using JPMorgan’s platform will be able to offer installment payments. Customers who pass a quick eligibility check will see a set of customized payment options with terms ranging from 30 days to 60 months. Affirm claims that approval decisions take approximately 10 to 12 seconds. Installment loans are available for purchases between $35 to $30,000.
Merchants within the JPMorgan payments network are expected to benefit as well. According to the company’s own research, retailers that offer Affirm at checkout experience 70% higher average cart sizes and nearly 30% fewer abandoned carts compared to other pay-over-time providers.
