BNPL Fintech Affirm and JPMorgan Chase Will Offer Loan Services to Merchants

Buy now, pay later (BNPL) loan company Affirm has partnered with banking conglomerate JPMorgan Chase. The two firms are working together to offer BNPL services to merchants.

Affirm, which provides short-term installment loans on purchases, will be presented as a payment method at checkout for merchants who use JP Morgan to handle money transactions. It has not yet been announced exactly when the option will be launched to merchants.

“The demand for diverse payment options, flexibility, and seamless transactions from both merchants and their customers is at an all-time high,” said Michael Lozanoff, global head of merchant services at JPMorgan Payments, per CNBC. “By incorporating Affirm as a payment method into our Commerce Platform, we are empowering businesses to deliver the services they need and the experiences that customers increasingly expect as part of their retail journey.”

In February, rival BNPL loan provider Klarna announced its own partnership with JPMorgan. The Affirm deal appears to be similar to the Klarna relationship. Klarna will eventually show up as a payment option for consumers shopping from vendors that have also contracted with JPMorgan.

Consumers and Merchants Love BNPL Services Like Affirm

BNPL has altered the spending habits of consumers. These short-term loans are easy to qualify for and give borrowers — often with few other credit choices — more flexibility when paying for purchases.

According to a survey conducted by PYMNTS, over 50% of respondents purchased something with a BNPL loan in the last 12 months. More than three-quarters of those surveyed reported high levels of satisfaction when using BNPL services. The ability to pay over time, even for small purchases, appeals to consumers of all income levels.

Merchants like offering BNPL loans to customers. Compared to purchases made with traditional credit cards, consumers spend about 25% more on average. Conversion rates and consumer engagement are also improved when vendors promote BNPL options prior to checkout.

Affirm and Klarna are among the top players in the BNPL industry. Both compete head-to-head to add new merchants and partners to their networks. Earlier this month, Klarna announced a deal that opens up BNPL loans to millions of Walmart customers, striking a huge blow to rival Affirm.