By Sam Boughedda
Buy now, pay later company Affirm Holdings Inc (NASDAQ:AFRM) announced a partnership with online payment processing and credit card processing platform Stripe, on Tuesday.
Affirm said the strategic partnership will provide its Adaptive Checkout function to Stripe users in the US today. The Adaptive Checkout system uses Affirm’s smart decision engine to ‘make a real-time underwriting decision and offer consumers optimized bi-weekly and monthly pay over time options side-by-side.’
The deal means that any business using Stripe can integrate the technology into their checkout process. Affirm said customers can split the cost of purchases of up to $30,000, with a maximum credit limit of $17,500.
Buy now, pay later companies came under scrutiny back in December 2021 with the Consumer Financial Protection Bureau issuing a series of orders to Affirm, Afterpay, Klarna, PayPal (NASDAQ:PYPL), and Zip (ASX:ZIP) to collect information on the risks and benefits of the fast-growing loans.
Affirm’s Chief Revenue Officer Geoff Kott said businesses who offer Affirm at checkout have reported as much as 85% higher average order values compared to other payment methods.
“Stripe’s infrastructure, combined with Affirm’s customizable payment options and unrivaled flexibility and transparency, provides immense value for businesses looking to reach new customers, increase sales, and drive growth,” added Kott
Buy now, pay later firms such as Affirm earn their money by charging fees to the merchants rather than consumers. Affirm says businesses benefit from increased sales and cart conversion when using its services.
Affirm stock has fallen over 2% Tuesday.