Affirm partners with Worldpay and New York Life to enhance BNPL offerings amid competition with Klarna and PayPal
In a strategic move to enhance its market presence amid stiff competition in the buy now/pay later (BNPL) space, Affirm has entered into a distribution agreement with Worldpay, alongside expanding its collaboration with New York Life. These initiatives aim to bolster its installment lending capabilities, particularly as the fintech prepares for its forthcoming earnings call.
The partnership with Worldpay marks a significant step for Affirm. By integrating its offerings into Worldpay’s embedded payments platform, Affirm will gain access to over 1,000 software-as-a-service (SaaS) companies that have collectively processed more than $400 billion in payments in the past year. This integration allows these SaaS firms to provide Affirm’s financing options, which feature rates starting at 0% annual percentage rate for purchases ranging from $35 to $30,000, with repayment plans varying from 30 days to 60 months. Wayne Pommen, Chief Revenue Officer at Affirm, emphasized the importance of being present where consumers prefer to make payments, stating, “Our strategy has always been to have our methods available in as many places as possible.”
The concept of embedded payments—integrating checkout within third-party applications—is becoming increasingly vital in streamlining payment processes. This is especially relevant as more businesses, ranging from gyms to medical offices, look to offer seamless payment solutions through their software. Pommen noted that these platforms play a crucial role in the evolving payments landscape, indicating the strategic importance of Affirm’s collaboration with Worldpay.
In addition to bolstering its merchant partnerships, Affirm’s deal with New York Life involves a commitment to purchase up to $750 million of Affirm’s installment loans through December 2026. This agreement is poised to provide off-balance-sheet funding that can facilitate approximately $1.75 billion in consumer loan volume annually. New York Life has previously invested nearly $2 billion in Affirm’s collateral, showcasing the insurance giant’s confidence in Affirm’s credit performance. “Affirm has distinguished itself by delivering superior credit outcomes that generate attractive returns,” stated Brendan Feeney from New York Life.
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While Pommen refrained from commenting on the status of other partnerships, including Global Payments’ ongoing acquisition of Worldpay, he highlighted the importance of maintaining diverse partnerships for scaling operations. The competitive landscape of BNPL is heating up, with rivals like PayPal and Klarna also expanding their offerings. PayPal recently secured a similar investment collaboration with Blue Owl Capital to broaden its BNPL portfolio, processing over $33 billion in BNPL payment volume in 2024—an increase of 21% from the previous year.
As Affirm works to enhance its market position, analysts observe a mix of potential growth and challenges within the BNPL sector. Morgan Stanley’s research report pointed out that while the holiday season typically boosts growth prospects, there are emerging concerns regarding credit performance and the overall health of private credit funding avenues.
With its focused collaboration strategies and innovative payment solutions, Affirm aims to navigate these challenges and solidify its footing in the increasingly competitive BNPL market. As the fintech prepares for its earnings report, the outcomes of these strategic partnerships will be closely watched by industry analysts and investors alike.
