The news: Affirm is reportedly considering a subscription service called Affirm Plus, per Bloomberg. Code for the service was discovered in the company’s iPhone app.
Why this matters: A subscription service could help Affirm overcome the profitability struggle BNPL fintechs face.
Will it work? Affirm will reportedly charge $7.99 per month for the service.
Affirm Plus would bring in a new and consistent revenue stream for Affirm. But the BNPL provider will need to weigh the risks of a potentially large increase in 0% APR loans, especially since many consumers struggle to make their BNPL payments on time. There’s also a risk the subscription revenues won’t bring in enough to make up for the loss of interest revenues.
The bigger picture: Affirm isn’t the first financing provider to offer a subscription.
The takeaway: BNPL is reimagining how consumers access credit as providers explore new fee and interest models. We expect this will have a bigger impact on the credit card space as BNPL players continue to push the envelope.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a three-times-weekly recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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