The news: Affirm’s total revenues increased 36% YoY to $783 million, per its Q3 FY 2025 earnings (ended December 31, 2024).
Strong interest income, network revenues, and servicing income contributed to these gains.
0% APR loans: Affirm is working with merchants on different 0% APR “promotional finance” deals for its longer-term loans. If it can entice prime borrowers and develop customer loyalty, the company believes it will be worth it for its long-term strategy.
Swiping (left and) right: The Affirm Card notched $807 million in gross merchandise value from approximately 2 million cardholders. The card helps bring BNPL purchases to in-person retail, where fintechs need to penetrate to increase their market share.
The Affirm Card does face challenges attracting new cardholders: It doesn’t offer robust rewards like credit cards. If the BNPL provider wants to snag more users, it needs to offer competitive incentives.
Partnering up: Affirm sealed a deal with Costco to become the wholesaler’s exclusive BNPL provider. This win combats Affirm’s recent loss of Walmart to Klarna.
Affirm also benefited from recent tie-ups with Adyen, which helped the company burrow into the UK market.
Our take: Affirm is attempting to break away from its competition by mimicking traditional lenders: Affirm started reporting loans to TransUnion this month and is chipping into in-person retail sales with the Affirm Card.
The BNPL company is betting that growing its brand halo will pay off in attracting prime and super prime borrowers—feathering its nest with reliable, bigger-spending payment customers for long-term profitability.
First Published on May 9, 2025