The news: Buy now, pay later (BNPL) provider Affirm’s Adaptive Checkout will now be available to all Worldpay from FIS merchants, per a press release. Worldpay merchants will be able to offer consumers biweekly and monthly payment options.
Affirm’s financial state: Affirm has had trouble keeping up with the rapid growth from fiscal 2022.
- In fiscal Q3 2023 (ended March 31, 2023), Affirm’s gross merchandise volume (GMV) grew 18% year over year (YoY)—a major slowdown from the 73% YoY surge from the same period a year ago.
- Affirm’s active consumer base grew 26% YoY to hit 16.0 million users, another sharp pullback from 137% growth the prior year.
- And the company’s revenues increased 7% YoY to reach $381 million, versus 54% growth last year.
The bigger picture: Affirm, along with the rest of the BNPL industry, faces a multitude of challenges that has impeded growth— cooler discretionary spend, regulatory scrutiny, and competitive threats like Apple Pay Later.
To withstand these hurdles, many BNPL providers—including Affirm—are restructuring.
- Affirm laid off 19% of its staff in Q3 and shut down its cryptocurrency business.
- It also shuttered its business in Australia to focus on its home market and Canada.
- The total restructure—which could cost $39 million—aims to create a “nimbler team,” CEO Max Levchin said during the Q3 earnings call.
Why this tie-up matters: Affirm is targeting profitability by the end of fiscal 2023. Working with Worldpay can help it reach that goal.
- The tie-up brings Affirm to a massive new merchant network: Worldpay serves more than 1 million merchants globally.
- This will help extend Affirm’s reach and bring in new customers, which can boost volume growth: We predict Affirm’s US payment value will reach $20.54 billion in 2023, up 22.5% YoY, per our forecast.
Digging deeper: For a closer look at key trends we’re watching in the BNPL industry, read our “State of Payment Methods” report.