Buy now/pay later lender Affirm and global fintech FIS are gearing up to offer pay-over-time financing to debit cards in a move that is poised to make BNPL loans even more ubiquitous.
The new program will allow FIS’ bank clients to add biweekly and monthly payment plans to their own debit card programs, similar to the way the Affirm Card works. Banks will also be able to tap into merchant-funded financing offers such as 0% APR, longer terms and higher credit limits, according to an Affirm release. The Affirm Card allows customers to use the lenders’ BNPL products even if the company doesn’t have a direct relationship with the merchant.
The collaboration comes as BNPL lenders seek partners to quickly build scale among consumers and merchants. The forthcoming partnership was announced Tuesday, the same day Klarna said it struck a deal with JPMorgan Payments, the largest merchant acquirer in the U.S. by payment volume, to offer its BNPL loans to JPM’s merchant network.
Affirm will manage underwriting and servicing of the loans. The specific launch date was not specified in the release, and Affirm and FIS declined to comment further on the partnership.
“Customer conversion and retention have become major priorities for card-issuing banks in our increasingly digitized economy, where consumers have endless options,” said Jim Johnson, co-president of banking solutions at FIS, in a statement. “This new program will deliver Affirm’s leading-edge technology, flexible and transparent payment options, and extensive merchant network to our banking clients, enabling them to continue meeting these needs and offer more competitive, differentiated services through their own banking channels.”
For FIS, integrating BNPL into debit cards gives financial institutions a way to retain customers within their own digital ecosystem rather than losing them to other FI’s or BNPL vendors, said Ben Danner, a senior research analyst at Javelin Strategy & Research.
“It’s a smart, innovative way to bring a very popular payment method to FI’s of all sizes,” he said. “Why download another app if I can do it all within my bank’s app?”
For Affirm, the partnership extends its reach to FIS’ “vast network” of merchants, allowing them to offer Affirm at the point of sale, Danner said.
But it also opens up opportunities to offer BNPL on any transaction made with a debit card. That means more potential customers, which Affirm’s CEO Max Levchin has maintained is key to its march toward profitability.
