By the numbers: US-based buy now, pay later (BNPL) company Affirm processed $2.713 billion in gross merchandise volume (GMV) in its fiscal Q1 2022 (ended September 31, 2021), an 84% year-over-year (YoY) increase, per its quarterly earnings supplement.

• Growth outperformed the same period last year, when GMV increased 71% YoY. An increase in overall retail sales in the last few months combined with elevated BNPL adoption in the last year may have contributed to Affirm’s business growth in the quarter.
• The number of active merchants in Affirm’s network skyrocketed 1,468% YoY and hit 102,000. On Affirm’s earnings call, CFO Michael Linford highlighted its partnership with Shopify as one of the biggest drivers for merchant network growth: Shop Pay, Shopify’s installment lending solution powered by Affirm, became widely available at the end of June. And at the start of the quarter, Shopify and Affirm ran a campaign to promote adoption among merchants.
• Active customers surged 124% YoY. Aside from the Shopify partnership, Linford said Affirm’s acquisition of Canada-based BNPL firm PayBright and returns processing provider Returnly added 120,000 additional customers from Q4 FY2021.

What’s next? Affirm CEO Max Levchin said merchant partnerships represent valuable growth opportunities for the company—coupled with platform innovations, this could help expand Affirm’s business in the coming quarter.

As the holiday season approaches, Affirm’s Amazon and Walmart partnerships could prove lucrative.

• The Walmart tie-up, which began in 2019, could help Affirm drive GMV growth: Walmart’s US ecommerce sales are expected to surpass $60 billion this year, per eMarketer forecasts from Insider Intelligence. And with in-store foot traffic also expected to bounce back from last year, Affirm will likely see gains from brick-and-mortar shoppers.
• Affirm’s exclusive partnership with Amazon should also give the BNPL provider a major boost considering the etailer’s holiday track record.

And new customer tools and app features should also sustain Affirm’s performance.

• Levchin revealed that Affirm shipped out the first version of its super app—just days after rival Klarna unveiled its own super app.
• He said the company is piloting cash-back rewards and a crypto savings tool that would let customers buy and sell crypto from their Affirm savings account. These features may eventually make it into Affirm’s super app and could help the company diversify its revenue streams to rely less on retail partners like Peloton, one of its largest merchants.

Related content: Check out “The Buy Now, Pay Later Report” for an in-depth look into the US BNPL market and how incumbents like Affirm stack up against competitors.