Affirm buy now, pay later loans coming later this year

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Affirm buy now, pay later loans coming later this year

Chris Ratcliffe | Bloomberg |

Apple Device users will soon be able to access Buy Now, Pay Later credits from Confirm for purchases, the companies said on Tuesday.

Affirm will be available as an option for US Apple Pay users on iPhones and iPads later this year, the San Francisco-based fintech company said in a statement. Apple confirmed the news in its own update.

“This provides users with additional payment options and offers the ease, convenience and security of Apple Pay along with the features users value in Affirm – flexibility, transparency and no late or hidden fees,” Affirm said in an email statement.

The move is a boost for Affirm and the buy now, pay later sector in general. When Apple introduced its own BNPL product last year, investors were worried that the tech giant would crowd out standalone providers like Affirm. But the fact that Apple has decided to include Affirm products in its ecosystem as well shows that the fintech company has something unique to offer.

While Apple's BNPL loan, for example, allows users to repay purchases in four installments over six weeks, Affirm offers a range of longer-term offerings that can be repaid over a year or more. The companies did not disclose details on the terms of the new loans.

“The bottom line – in our view – is that Affirm's strong brand and mature underwriting technology provide a competitive advantage that Apple likely could not achieve on its own,” said Dan Dolev, an analyst at Mizuho Securities, in a research note.

Citi, Synchrony

Apple also said that installment loans via credit and debit cards would be available through Apple Pay in the US with Citigroup, Synchronicity And Fiserv-related issuers. Traditional credit card providers have started offering BNPL-style installment loans after their popularity soared during the Covid pandemic

Synchrony said in an email that the company plans to offer personalized installment loans with special promotions based on transaction size and the merchant involved, with potential special offers on interest rates and loan terms.

“This announcement with Apple is an opportunity for Synchrony to scale our flexible payment options and provide our merchants with the ability to expand their presence in a growing mobile payments ecosystem,” said Mike Bopp, Synchrony’s chief growth officer, in an email.

Thanks to the ubiquity of the iPhone, Apple Pay has more than 500 million users worldwide and has a leading market share in the United States with its mobile payments and digital wallet platform.

Affirm shares rose 11% on Tuesday, while Apple shares rose 7.3%.

Affirm shares rose even though the company indicated it would take some time for the partnership to result in a significant increase in revenue.

“Affirm does not expect this partnership to have a material impact on revenue or gross merchandise volume in fiscal year 2025,” the company said in a statement.

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