Affirm announced its newest buy now, pay later (BNPL) options, giving consumers more flexibility in how they pay for their purchases.
Pay in 2 allows customers to split a purchase into two interest-free payments, while Pay in 30 lets users pay for a purchase, with no interest, within 30 days.
The company says the short-term alternatives were offered partly because 80% of U.S. ecommerce transactions are under $150. The options are also designed to capitalize on the fact that around 30% of non-farm workers get paid on a biweekly or monthly basis. This gives Affirm’s 16.4 million U.S. users another option besides the company’s traditional Pay in 4 model.
“Providing greater choice and flexibility is key to meeting our consumers where they are,” said Vishal Kapoor, Head of Product at Affirm in a prepared statement. “Adding options like Pay in 2 and Pay in 30 allows us to better meet consumers’ individual preferences, enabling them to pay for purchases large or small with more options that works best for their budgets.”
Credit Card Alternative
There have been concerns about the future of buy now, pay later after the Consumer Financial Protection Bureau (CFPB) issued an interpretive rule stating BNPL providers must conform to the same regulations as credit card companies.
This includes providing customers with monthly statements and transparently reporting any interest or fees. The ruling was significant because BNPL companies have touted themselves as an alternative to credit cards.
In response to the rule, Affirm’s leadership noted that they’re “aligned with responsibly extending access to credit as we do not charge late or hidden fees.” What’s more, the company said it urges other BNPL providers “to live up to the industry’s promise to provide consumers with a more flexible and transparent alternative to other payment options.”
An Increasing Footprint
Though the BNPL sector faced some market pressure following the ruling, there aren’t likely to be long-term ramifications. In fact, Affirm just increased its footprint with a recent deal with Sensepass. The Sensepass platform currently integrates with 100 wallets, including Venmo and WeChat Pay.
Affirm’s BNPL products are now offered by more than 292,000 U.S. merchants at the point-of-sale, including Walmart, Amazon, Target, and Dick’s Sporting Goods. In early tests, the company’s Pay in 2 and Pay in 30 options showed increased cart conversions, and will be rolled out to Affirm’s retail partners in the next few months.
