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With more than 100 million U.S. consumers expected to choose a buy now, pay later payment option by 2027, according to eMarketer Inc., BNPL providers are preparing better underwriting and new services as the payment option is further cemented in the U.S. payments economy.
Affirm Holdings Inc. says its underwriting now uses real-time data like account balances and cash flow trends from users who have connected their bank accounts to their Affirm accounts. San Francisco-based Affirm already does this for Affirm Card users who have linked a third-party bank account or have an Affirm Money Account. Affirm launched its card in 2023.
Affirm says this underwriting measure will expand to more of its users who also linked their bank accounts to Affirm. Consumers apply each time they want to use the Affirm payment, which means Affirm makes a real-time credit decision on their financial situation at that moment. In addition to conventional underwriting components such as the purchase, credit history, and past payment experience with Affirm, the new data will provide detailed insights into activity in the linked bank accounts.
Affirm says the real-time information “adds nuance and context to Affirm’s decision-making, it also enables Affirm to responsibly reach more consumers—especially those whose credit history is limited or doesn’t fully reflect their current situation.” A J.D. Power survey found that BNPL is the fourth-most accepted form of payment, behind credit and debit cards, digital wallets, and cash.
In related news, Klarna AB, which has steadily grown beyond its initial BNPL-only offering, says it is debuting a peer-to-peer payments service in 13 European countries.
Initially, the P2P payment service will work only among Klarna account holders, though the Stockholm-based company says it intends to expand availability to non-Klarna customers and for cross-border payments. To use the service, a sender selects a recipient’s phone number, email address, QR code, or saved contact information. After confirming the amount, Klarna scans it for fraud and eligibility before sending the funds.
Klarna says the service uses traditional bank money-movement systems, though it is exploring stablecoin-based options.
