Brianna ParkerAffirm is a publicly traded fintech firm based in San Francisco, California. The company was founded in 2012 by Max Levchinto offer buy now, pay later (BNPL) services.
Its BNPL app allows customers to borrow up to $17,500 for purchases and spread out the cost over 3, 6, or 12 months. Since its founding, Affirm has financed 17 million purchases. In 2021, Affirm’s annual revenue increased by 71% to$870.5 million. [1]
Affirm is the leading installment payment and Buy Now Pay Later (BNPL) service provider. Its customers get a loan for online or in-store purchases and split them into four installments. This flexible approach lightens the financial burden associated with big-ticket items.
In Jan 2021, Affirmwent public at a valuation of $9 billion. Its market capitalization surged to $47billion before dropping to $5 billion after its stock declined 89%between Nov 2021 and May 2022. The fintech partners with renowned brands and retailers, including Shopify, Amazon, Walmart, Apple Pay, Adidas, and Peloton.
But Affirmisnot available in all stores and charges up to 30%interest rates on long-term loans. It also requires a credit check to qualify for a loan, locking out consumers with a poor credit score.
Fortunately, Affirmis not the only BNPL app. Consumers can use Affirm alternatives, such as Sezzle, PayPal, Klarna, Afterpay, Zip Pay, and Splitit.[2]
Here is an in-depth analysis of top Affirm’s competitors and alternatives:
1. Sezzle
Year founded: 2016
Headquarter: Minneapolis, Minnesota
Sezzle is a publicly-traded fintech company that financially empowers consumers in Canada, the US, Germany, and India. Its payment platform offers interest-free installment plans at online stores and in-store locations.
In Feb 2022, Zip agreed to acquire Sezzle in a statutory merger. The deal sets Sezzle’s valuation at around A$491 million. [3]
Sezzle and Affirm are the leading BNPL providers. More than 3.2 million active customers and 47,000 merchants use Sezzle’s platform to buy now and pay later. The main benefit of using Sezzle is its flexible payment plans.
Customers can reschedule payments for up to two weeks of additional time. And the first reschedule for each order is free. The platform also doesn’t charge interest on purchases. Sezzle is the top Affirm competitor and alternative.
2. PayPal Holdings Inc.
Year founded: 1998
Headquarter: San Francisco, California
PayPal isan Americanfintech company that offersan online payment processing platform for P2P payments. Its payment processor caters to online vendors, auction sites, and other commercial usersglobally for a fee.In 2021, PayPal’s revenue increased by 18.26% to $25.37 billion.
PayPal added new payment options on its platform for in-store and online purchases. In Dec 2021, Affirm launched its own Cash Back program. PayPal countered Affirm’s strategy in Feb 2022 by revamping its PayPal Cashback Mastercard credit card to give users 3% cashback whenever they pay with PayPal.
This offering covers all checkouts made using PayPal via mobile devices, online, or in-store PayPal QR Codes. The company also offers PayPal “Pay in 4,” used by millions of online merchants for transactions ranging from $30 to $1,500. Pay in 4 is the best alternative to Affirm for making small BNPL purchases.[4]
3. KlarnaBank AB
Year founded: 2005
Headquarter: Stockholm, Sweden
Klarna is a Swedish fintech company that offers online financial services. The platform provides online, direct, and post-purchase payments. In 2021, Klarna had around 7,000 employees in 16 locations globally and generated $1.6 billion in revenue.
Klarna allows online stores to provide multiple payment methods using a single solution, saving time and money. Like Affirm, Klarna is a buy now, pay later pioneer. But the company faces one of the biggest challenges in its 17-year history. Klarna’s net losses quadrupled to $254million in Q1 2022 and its cash flow plunged from $500 million to -$500 million within a year.
In May 2022, the Swedish fintechlaid off 10% of its workforce and shifted its focus from growth to short-term profitability. This move can attract long-term investors. With a valuation of $46 billion, Klarnais the most valuable private tech company in Europe and one of the top alternatives to Affirm. [5]
4. Afterpay Limited
Year founded: 2014
Headquarter: Melbourne, Australia
Afterpay is an Australian fintech company that offersBNPL service. The firm operates as Afterpay in Australia, Canada, the US, and New Zealand, but it is known as Clearpay in the UK and Europe. In Jan 2022, US-based Block acquired Afterpay for $39 billion.
Afterpay integrates seamlessly with online stores via API or third-party plugins. The fintech also provides tech support for initial integrations and ongoing maintenance. In the first half of 2022, Afterpay’s revenue increased by 55% to$645 million. But the company reported an after-tax loss of $345.5 million, including $176.7 million in bad debts.
Afterpay’soperating expenses surged by 287% to $212.3 million, deepening its losses further. As of Jun 2021, Afterpay had 16.2 million users globally. Afterpay is a worthy Affirm competitor. [6]
5. Zip Co. Limited
Year founded: 2013
Headquarter: Sydney, New South Wales, Australia
Formerly Quadpay, Zip is an Australian fintech and BNPL company. Its platform allows users to shop at their favorite stores and pay over four installments.
In H1 FY22, Zip reported a loss of $153.6 million compared to $139.8 million in H1 FY21. The company’s bad debts increased to $115.4 million from $22.4 million written off in the first half of 2021.
Zip shares dropped 80% in value in the first four months of 2022 due to soaring bad debts and credit losses. But the company has expanded its global footprint in the past 2 years. In Feb 2022, Zip acquired Sezzlefor A$491 million. Zip is one of the fastest-growing Affirm competitors and alternatives. [7]
6. Splitit
Year founded: 2012
Headquarter: New York City, New York
Splitit is a publicly-traded company that offers a BNPL app. Its app allows customers to shop online via eCommerce platforms using their Visa, Mastercard, Discover, and Union Pay credit cards. Users earn rewards on their purchases and pay over time with no interest.
In 2021, Splititreported an annual merchant sales volume (MSV) of $396 million.
Splitit does not require consumers to apply or register to use its BNPL service. Merchants rely on Splitit to offer their customers interest-free monthly payment plans using their credit and debit cards. Unlike Affirm, Splitit does not charge consumers any interest or fees.
Monthly installments are deducted from the customer’s card, reducing the pending amount. The process repeats every month until the purchase is paid in full. Splitit is the alternative to Affirm with no credit check. [8]
7. GoCardless
Year founded: 2011
Headquarter: London, UK
GoCardless is a London-based fintech and a global leader in account-to-account payments. Its online payment platform allows businesses to collect and manage recurring and one-off payments from customers’ banks. In 2021, GoCardless processed more than $25 billion in transactions and served over 70,000 businesses worldwide.
GoCardless offers complete visibility on payments and charges a 1% fee per transaction. In Feb 2022, GoCardless raised $312 million in a Series G funding round and increased its valuation to $2.1 billion. Its headcount has surged by 85%since Dec 2020.
In 2021, GoCardless collaborated with BillingPlatform to streamline its quote-to-cash process and unveiled its Instant Bank Pay feature for instant payments. The BNPL company also teamed up with Klarna to offer the service to more than 21 million US customers. GoCardless is one of the best alternatives to Affirm for installment payments and BNPL. [9]
8. ViaBill
Year founded: 2010
Headquarter: New York City, New York
ViaBill is a leading BNPL service provider. The platform integrates with websites’ checkout flow to allow users to pay the total amount or installments. In Feb 2022, ViaBill raised $120 million to extend its BNPL solutions to brick-and-mortar shops.
Both Affirm and ViaBill offer BNPL services. But ViaBill supports online and brick-and-mortar stores. Since its founding, ViaBill has empowered merchants and shoppers in Denmark, Spain, and the US by delivering convenient and flexible payment options.
Shoppers can split payments into installments and pay back over time, interest-free. In Q4 2021, ViaBill tested its new BNPL product on 11,000 consumers before launching it across Spain, Denmark, and the US. ViaBill is the best alternative to Affirm for BNPL transactions in brick-and-mortar shops.[10]
9. Uplift
Year founded: 2014
Headquarter: Menlo Park, California
Uplift is a BNPL website that offers fixed-rate loans for travel purposes. Users pay back their loans in monthly installments with interest. In 2021, Uplift had 133 merchant partners. The fintech has raised $695 million in equity and debt since its founding.
Both Uplift and Affirm offer BNPL services for travel. Affirm supports third-party booking sites, such as CheapOair, Just Fly, Alternative Airlines, and Priceline. However, Uplift offers a wider variety of airlines. Its customers can purchase tickets for $300 to $15,000 directly from airlines and pay later.
Note that Uplift caters to the entire travel sector. So, consumers can book cruises, hotels, and vacation packages via its BNPL website. Uplift is the best alternative to Affirm for travelers. [11]
10. Amazon
Year founded: 1994
Headquarter: Seattle, Washington
Amazon is the leading eCommerce platform. The company partnered with Affirm in Aug 2021 to offer aBNPL checkout option via its US platform for the first time. It also provides BNPL in Australia in partnership with Zip.
The Affirm-Amazon partnership allows Amazon customers to split over $50 purchases into monthly payments. But the BNPL option doesn’t cover purchases from Whole Foods, Amazon Fresh, and digital products like movies and books. Amazon is one of the top alternatives to Affirm for BNPL services. [12]
11. Laybuy
Year founded: 2016
Headquarter: New Zealand
Laybuy is a New Zealand financial technology firm. Its platform offers a BNPL service that allows users to pay for purchases in six weekly installments. According toFairer Finance 2022 customer poll, Laybuy is the most trusted BNPL brand.
Laybuy requires customers to pay the first installment on the day of purchase. Unlike Affirm, Laybuy charges a fee of £6-£24 for missed payments. In May 2022, Times Magazine and Fairer Finance awarded Laybuy the title of Most Trusted brand after polling 10,000 UK consumers.
The platform ranked third in the customer-satisfaction rating behind rivals Klarna and Clearpay. Laybuy is a worthy Affirm competitor in the BNPL space.[13]
12. Paytm Postpaid
Year founded: 2010
Headquarter: Noida, Uttar Pradesh, India
Paytm is the largest e-commerce and mobile payments platform in India. In Nov 2017, the fintech introduced a BNPL option on its app known as Paytm Postpaid. Customers can acquire instant credit of up to Rs. 60,000 and use their credit limit to make purchases and pay bills.
Paytm’s instant credit is payable within 30 days with no interestor in easy EMIs over 6 months. Each timely payment improves the customer’s credit score. The service is accepted at over 10 million online and offline stores across the country.
With over 39 million daily users, Paytm is a force to reckon with in mobile payments. Paytm Postpaid is the best alternative to Affirm in India. [14]
13. ApplePay
Year founded: 1976
Headquarter: Cupertino, California
Apple Pay is an online payment platform offered by Apple Inc. The company has partnered with BNPL providers to provide the service in India and Canada, including Affirm. In 2021, Apple’s revenue was $365 billion. Apple Pay is projected to generate $4 billion in 2023, up from$988 million in 2019. [15]
Apple is working with Goldman Sachs, its Apple Card partner, to develop a BNPL service running on its Apple Pay wallet. Apple Pay’s UIcansupport BNPL for the physical point of sale and grab a substantial market share from existing fintech firms.
According to experts, Apple’s entry into the BNPL space will strengthen its hold on the vast iPhone user base. Apple Pay BNPL is the best alternative to Affirm for Apple users. [16]
14. Perpay
Year founded: 2014
Headquarter: Philadelphia, Pennsylvania
Prepay is a BNPL platform that allows customers to shop from over 1,000 brands via the Perpay marketplace. According to Inc. Magazine, Perpay is one of the fastest-growing private companies in the fintech sector. In 2021, Perpay had 45 employees and over three million members.
Perpay users improve their credit score by 39 points by making on-time payments. Customers start shopping within 60 seconds after completing their Perpay profile and receive their orders after making the first payment.
Affirm and other BNPL apps only offer four installments of 25% each. Unlike Affirm, Perpay allows users to choose 4, 8, 16, or 18 payments and sets their spending limit based on current income. Perpay is the best alternative to Affirm for consumers with bad credit. [17]
15. Thunes
Year founded: 2016
Headquarter: Singapore
Thunes is a global B2B company that offers a cross-border payments platform. The company has regional offices in London, Paris, Shanghai, New York, Dubai, and Nairobi and powers payments for the world’s fastest-growing businesses.
In 2021, Thunes supported 79 currencies across 126 countries. Users can make payments to recipients in more than 100 countries and collect funds from customers through 300 different methods globally. [18]
In Mar 2022, Thunes partnered with Afterpay’s Europe subsidiary Clearpay. The fintech now offers BNPL service to its expansive network of merchants and marketplace partners. Thunes is the newest Affirm competitor in the UK and Europe. [19]
References & more information
- Affirm (2021, Sep 9). Affirm Reports Fourth Quarter and Fiscal Year 2021 Results. Bloomberg
- Moise, I. (2022, May 11). Affirm struggles to convince investors of fintech bona fides. FT
- Sezzle (2022, Feb 27). ZIP Announces Definitive Agreement to Acquire Sezzle. PRNewswire
- Perez, S. (2022, Apr 5). PayPal’s new credit card pays 3% cashback on all PayPal purchases. TechCrunch
- Milne, R. (2022, May 26). Klarna CEO says fintech will focus less on growth and more on short-term profitability. FT
- Allen, L. (2022, Apr 14). Afterpay suffers damning $345m loss blow-out under new owner Block. Small Caps
- Teboneras, A. (2022, May 24). The Zip share price is down 80% in 2022. Should you cut your losses? The Motley Fool
- Lambarena, M. (2021, Nov 2). 5 Things to Know About Splitit. Nerd Wallet
- PYMNTS (2022, Feb 8). GoCardless Valued at $2.1B After Series G. PYMNTS
- ViaBill (2022, Feb 15). ViaBill Raises $120m to Bring Buy Now Pay Later to Physical Retail. Business Wire
- Kenkare, P. (2022, May 17). Best ‘Buy Now, Pay Later’ Apps for May 2022. CNET
- Ryan, T. (2021, Aug 30). Amazon finally catches the ‘buy now, pay later’ wave. Retail Wire
- Daley, J. (2022, May 10). Best Buy Now, Pay Later companies. The Times
- Paytm (2021, Nov 22). What is Paytm Postpaid? Learn Everything About It! Paytm Blog
- SRD (2022, Mar 15). Apple Pay revenue worldwide 2019-2023. Statista
- Cocheo, S. (2022, Apr 4). Apple’s Growth Strategy Emphasizes Payments + Buy Now, Pay Later. The Financial Brand
- Mosconi, A. L. (2021, Jul 15). Perpay now helps customers improve their credit scores. Technical.ly
- Prosser, D. (2021, Nov 12). How Thunes is Building a New Payment System for the World. Forbes
- Thunes Admin (2022, Mar 31). Thunes Partners with Clearpay to Enable Buy-Now-Pay-Later Options for its 100,000 Merchants. Thunes
- Featured image by CardMapr.nl
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Ava Abbott
Kevin Johnson
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