Affirm

Affirm (NASDAQ: AFRM) is the leading US pure-play buy-now-pay-later provider, operating a network of approximately 26 million active consumers and deep integrations with major merchants including Amazon, Shopify, and Walmart. Unlike PayPal Holdings’ Pay Later / Pay in 4, which is embedded within a broader wallet ecosystem, Affirm operates as a standalone BNPL infrastructure layer — merchants integrate Affirm directly at checkout to offer instalment payment options. Affirm’s core differentiation is underwriting transparency (no hidden fees, fixed repayment schedules) and 14 years of proprietary credit training data, which it claims produces superior loss performance relative to peers.

In fiscal Q4 2025 (quarter ending June 2025), Affirm reported GMV growth of 43% YoY — the highest quarterly growth rate in two years — and achieved its first quarterly GAAP profit with diluted EPS of $0.20. Over the trailing 12 months to March 2026, GMV grew approximately 39%. Approximately two-thirds of volume is monthly interest-bearing loans; Pay in 4 (0% APR instalment) represents about one-sixth. The Affirm Card — a physical/virtual card enabling BNPL at non-integrated merchants — reached 16% of total GMV with user adoption and Card GMV both more than doubling YoY. A January 2026 bank subsidiary application, if approved, would allow Affirm to fund ~10% of its loan book via deposits within three years, materially reducing funding costs.

The Amazon relationship is Affirm’s most consequential and most concentrated merchant dependency. A five-year renewal signed in early 2026 extends Affirm as Amazon’s primary BNPL option — a partnership that accounts for a disproportionate share of GMV. Other recent wins include Expedia, Intuit, Lowe’s, ServiceTitan, Virgin Media O2, and Wayfair. The 96% repeat-borrower rate suggests strong consumer retention, and adjusted operating income reached approximately 30% of revenue in the most recent quarter — a profitability milestone that repositions Affirm as a maturing fintech rather than a growth-at-all-costs play.

The competitive dynamic between Affirm and PayPal Holdings’ BNPL products is structural rather than tactical. PayPal’s Pay Later (Pay in 4 and Pay Monthly) operates as an attachment on top of branded checkout — a consumer who already chose PayPal can optionally split payments. Affirm competes at the merchant integration level, sitting alongside PayPal as an alternative method of payment rather than underneath it. Merchants on Shopify, for instance, can offer both Affirm BNPL and Shop Pay at checkout simultaneously. Apple’s quiet discontinuation of Apple Pay Later in 2024 removed what would have been Affirm’s most dangerous competitor — a natively integrated, biometric-authenticated BNPL option across the Apple device ecosystem. Klarna’s US expansion via Klarna’s own merchant integrations and shopping app represents the more direct peer competition for Affirm’s European-origin rival.

Ontology

Affirm [competes] PayPal Holdings // BNPL at merchant checkout Affirm [competes] Klarna // US BNPL market Affirm [relates] Shopify // Affirm is default BNPL in Shopify checkout Affirm [relates] Apple Pay // Apple Pay Later discontinued — cleared competitive field Affirm [part-of] PayPal Branded Checkout // BNPL as checkout share competition

Connections

• PayPal Holdings — BNPL competitor; PayPal Pay Later competes at merchant checkout
• Klarna — European-origin peer; both compete for US BNPL merchant integrations
• Shopify — Affirm is default BNPL option in Shopify checkout
• Apple Pay — Apple Pay Later discontinued 2024; removal cleared the most dangerous competitor
• PayPal Branded Checkout — competes for share of total checkout payment methods
• Shop Pay — both present at Shopify checkout; different roles (wallet vs. BNPL)