BNPL might seem like a 2021 trend, but payment companies still think the short-term credit plans are all the rage.
Affirm announced a partnership with Stripe Tuesday “to help businesses grow their revenue,” according to a press release. Klarna announced a similar partnership with the payments company in October, while Afterpay became available to some Square sellers in January after Block finalized the acquisition of the Australian "buy now, pay later" company last fall.
These partnerships promise opening up millions more transactions to "buy now, pay later" services, which profit from both the interchange charged to merchants and interest paid on purchases which aren't subsidized with a zero-interest offer. In both cases, merchants like the way "buy now, pay later" plans increase consumers' propensity to buy.
For Stripe, which wants to offer a broad variety of payment options, the partnership makes additional geographic sense. Affirm is stronger with U.S. sellers, while Klarna is stronger with those abroad.
The deals come at a moment when a growing group of economists and investors worry that "buy now, pay later" is either a risky trend or a passing fad. Affirm’s stock has fallen from roughly $177 last year, per TechCrunch, to just over $30 Tuesday morning. And Klarna set plans to lay off 10% of staff last week after it was reported the company was looking for more funding, possibly at a lower valuation.
But the companies are showing resilience in experimenting with multiple strategies. Several are looking into offering debit cards as part of a super app approach, aimed toward being an all-in-one shopping and discovery solution for customers and retailers. Square, which owns Afterpay, offers a card through Cash App, while Affirm has a debit card enabled with pay-later options. Klarna, which already offers the Klarna Card in parts of Europe, opened a waitlist for U.S. customers in February.
Ecommerce partnerships remain important to the "buy now, pay later" companies. Shopify and Amazon have partnerships with Affirm, while Klarna has partnerships with companies like Wish and AliExpress.