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As we quickly approach the peak shopping season in Europe and North America (Black Friday and Cyber Monday are less than a month away), it’s time to take a closer look at one of the major “Buy Now, Pay Later” (BNPL) players in the United States.

Affirm is a pioneering U.S.-based BNPL solution provider that recognized the growing number of consumers averse to credit cards. Initially, Affirm found success in the high average order value (AOV) space, by teaming up with Peloton to increase sales of their hugely popular exercise bikes. They also saw rapid growth in the home and lifestyle, and travel and fashion sectors, with merchants such as Walmart, Expedia, Pottery Barn and LuisaViaRoma  More recently, Affirm announced that they’ve expanded their merchant base through a partnership with Amazon—customers will be able to use Affirm for eligible purchases over USD $50. They are also the exclusive provider of BNPL on Shopify, offering financing at eligible merchants using the Shopify platform.

Affirm dynamically provides shoppers with the most relevant payment options—whether that means split pay, installments, or both. Their product is useful for everything from every day purchase to higher ticket value items—up to USD $17,500—quite a bit more than the maximum purchase limit of other providers.

Growth in popularity

An Affirm study from last holiday season revealed that 54 percent of shoppers say they are interested in using a pay-over-time solution this year, and that 58 percent see BNPL as a way to better budget. In all, three out of four Americans who have tried installment plans for the first time plan to select BNPL options at the checkout in the future.

Peak shopping season

This year, BNPL will undeniably play a big role in peak season shopping. In 2020, ACI saw BNPL transactions increase by 109 percent compared to the previous year. And according to Affirm’s holiday shopping season survey, 56 percent of shoppers are interested in using pay-over-time solutions for holiday shopping this year. Of these, 69 percent plan to use pay-over-time solutions to help keep them on budget (even if they could pay for the item in full).

With longer than usual delivery times for some branded goods this year, consumers are planning to start their holiday shopping sooner—in fact, 60 percent of shoppers surveyed by Affirm intend to start holiday shopping as early as October.

The profile of Affirm users is in line with the BNPL market in general, with Gen X and millennials accounting for most of the transaction volume. The main attraction of BNPL is the ability to manage cash flow and budget, which clearly appeals to a broad range of income levels. Shoppers are also drawn to Affirm due to the fact there are no late payment fees, which makes the service both transparent and flexible.

For merchants, Affirm can increase basket size by 85 percent on average across all verticals. Merchants are paid up front, similar to other leading BNPL solutions. Affirm offers merchants insight into their customer behavior through data analytics tools, which can help optimize checkout conversion.

Buy Now, Pay Later will continue to grow in popularity in North America as a viable alternative to credit cards. Affirm is seeing healthy growth with more than 7 million active consumers and 29,000 merchants. Merchants wanting to tap into the credit card averse demographic should certainly consider adding such BNPL payment methods to their checkout.

Affirm is offered through ACI Secure eCommerce, and ACI experts have deep market knowledge to help merchants get set up with the right mix of BNPL providers for their business.    

Payment options through Affirm are subject to eligibility, may not be available in all states, and are provided by these lending partners: CA residents: Loans by Affirm Loan Services, LLC are made or arranged pursuant to a California Finance Lenders Law license.

Senior Product Manager - Secure eCommerce