In a strategic move to expand its market presence within the competitive buy now/pay later (BNPL) sector, Affirm has announced a distribution agreement with Worldpay, while also enhancing its collaboration with New York Life. These initiatives are designed to strengthen Affirm’s installment lending capabilities ahead of its upcoming earnings call.
The partnership with Worldpay represents a pivotal development for Affirm. By incorporating its services into Worldpay’s embedded payments platform, Affirm will gain access to over 1,000 software-as-a-service (SaaS) companies that together have processed more than $400 billion in payments over the past year. This integration will enable these SaaS companies to offer Affirm’s financing options, which feature rates starting at an appealing 0% annual percentage rate for purchases ranging between $35 and $30,000, with repayment periods from 30 days to 60 months. Wayne Pommen, Chief Revenue Officer at Affirm, underscored the significance of being available where consumers prefer to transact, stating, “Our strategy has always been to have our methods available in as many places as possible.”
The growing trend of embedded payments—where checkout processes are integrated within third-party applications—has become increasingly essential for smooth payment transactions. Businesses, including gyms and medical offices, are increasingly seeking to deliver seamless payment options through their software, highlighting the strategic relevance of Affirm’s collaboration with Worldpay.
Further bolstering its merchant partnerships, Affirm’s agreement with New York Life includes a commitment to purchase up to $750 million of Affirm’s installment loans through December 2026. This commitment is expected to provide off-balance-sheet funding, potentially facilitating around $1.75 billion in consumer loan volume annually. New York Life’s past investment of nearly $2 billion in Affirm’s collateral reflects the insurer’s confidence in Affirm’s credit performance. Brendan Feeney from New York Life noted, “Affirm has distinguished itself by delivering superior credit outcomes that generate attractive returns.”
While Pommen did not comment on the status of other partnerships, including Global Payments’ acquisition of Worldpay, he emphasized the necessity of maintaining diverse partnerships to scale operations effectively. The BNPL arena is increasingly competitive, with rivals like PayPal and Klarna also enhancing their offerings. For instance, PayPal recently entered into a similar investment collaboration with Blue Owl Capital to expand its BNPL portfolio, handling over $33 billion in BNPL payment volume in 2024, marking a 21% increase from the previous year.
As Affirm strives to improve its market standing, analysts note a blend of growth opportunities and challenges within the BNPL landscape. A research report from Morgan Stanley highlighted potential growth during the holiday season, though emerging concerns regarding credit performance and the stability of private credit funding sources remain.
With its strategic collaborations and innovative payment solutions, Affirm is taking steps to address these challenges and strengthen its position in the increasingly competitive BNPL market. As the fintech prepares for its earnings report, the effects of these strategic partnerships will be closely monitored by industry analysts and investors.