Affirm BNPL Volumes Jump 36% as 0% Loans Drive Broader Use

Affirm’s fiscal second quarter illustrated how buy now, pay later is becoming embedded in routine commerce, where paying over time was once reserved for occasional large purchases.

The company said Thursday (Feb. 5) that gross merchandise volume (GMV) increased 36% year over year to $13.8 billion, while revenue climbed 30% to $1.1 billion. Network growth continued to broaden, with active consumers as of the end of last year rising 23% to 25.8 million, transactions per active consumer increasing 20% to 6.4, and active merchants expanding 42% to roughly 478,000, reflecting deeper engagement on both sides of the platform.

Growth came from a mix of point-of-sale integrations, wallet partnerships and Affirm’s direct-to-consumer business, led by the Affirm Card. Direct-to-consumer GMV rose 52% to $4.3 billion, driven primarily by Card volume, which surged 159% to $2.2 billion. Active cardholders more than doubled to 3.7 million, pushing card attach rates to about 14%.

Zero Interest Becomes Central to Checkout

Zero-interest financing played an increasingly central role in those results. GMV tied to 0% APR products, including Pay-in-X, grew 60% and continued to outpace overall platform growth. More than 60% of new Affirm customers chose a 0% option for their first transaction, the company said, and nearly 39% of all purchases during the quarter carried no interest. Roughly 60,000 merchants funded 0% APR offers during the period, nearly quadruple the prior year, underscoring how sellers are using these programs as a demand-generation tool rather than a limited promotion.

On the earnings call, CEO Max Levchin said Affirm’s approach rests on clarity at checkout, even as competitors experiment with more complicated offers.

“When Affirm says no interest, we actually mean no interest and there’s no asterisk,” Levchin told analysts. He added that Affirm’s pitch remains deliberately simple: “You are [paying] no interest. … It’s so easy to understand.”

That simplicity, Levchin said, has limited the impact of aggressive cashback campaigns elsewhere in the market. “We saw no effects,” he said. “All those promotional go-to-market motions just don’t seem to make a dent in what we sell.”

Affirm Card Extends BNPL Into Daily Spend

The Affirm Card continued to shift BNPL toward everyday usage. Card-based 0% APR GMV increased 190% year over year and now represents close to 20% of total Card volume, reflecting a steady migration from one-time installment purchases to repeat activity across categories.

Levchin described the Card as moving beyond its early adopter phase. “It’s no longer a cool novelty product for our die-hard users,” he said. “It’s helping us create more die-hard users.”

He also addressed the common assumption that customers who begin with promotional financing resist interest-bearing products later on. “There’s an industry myth that you self-select into a zero-APR deal and then react violently when it changes upward,” Levchin said. “That is not the case with the Affirm consumer.”

Consumer Health and Credit Remain Steady

Affirm reported stable credit performance alongside rising volumes. Thirty-plus-day delinquencies on monthly installment loans stood at 2.7%, up year over year but down sequentially, while recent cohorts continue to track toward roughly 3.5% net charge-offs. Pay-in-4 losses remained below 1% of GMV, and allowance for credit losses held at 5.4% of loans held for investment, consistent with last year.

Levchin characterized the customer base as resilient despite persistent macroeconomic uncertainty.

“The consumer we see today is quite healthy,” he said. “They’re able and willing to pay us back. They’re borrowing money. We feel pretty good about both the demand and the ability and willingness to repay.”  He added that quarter-to-date trends have not materially diverged from conditions exiting December.

Affirm’s internally developed AdaptAI and BoostAI systems increasingly shape financing offers and merchant performance. BoostAI, which runs automated A/B tests and deploys merchant-funded incentives, is now live across dozens of enterprise merchants and hundreds of small businesses.

Levchin described BoostAI as allowing merchants to allocate incremental dollars while Affirm determines how best to deploy them. “It allows a merchant to say, ‘I have $100,000 more dollars I’d like to put into Affirm-specific promotions, 0% or just reduced APRs, and you guys go A/B test who is most likely to convert.’”

New Verticals and Regulatory Positioning

During the quarter, Affirm expanded partnerships with major retailers, embedded pay-over-time into QuickBooks Payments for service providers, and began limited testing in rent-related use cases. Levchin stressed that the rental pilot is narrowly focused on timing mismatches, such as bridging paydays and due dates, rather than turning rent into long-term installment debt. “It’s very small,” he said. “Put nothing in your models for now,” he told analysts.

Levchin also expanded on the end of January announcement that it has applied for an industrial bank charter. Levchin framed the move primarily as a bid for regulatory clarity. He told analysts that owning a regulated subsidiary would provide clearer footing for partners and the company. He cautioned that approval timelines stretch over years and outcomes remain uncertain, characterizing the effort as a long-term investment rather than an immediate growth driver.

Affirm projected GMV in the current fiscal year of $48.3 billion to $48.85 billion (a deceleration from recent growth rates) and revenue between roughly $4.09 billion and $4.15 billion, with operating margins expected to improve in the second half of the year. Shares slipped 6% in after-hours trading on Thursday.

The quarter ultimately reflected a company pressing deeper into everyday commerce expanding distribution via the Affirm Card and partners, and increasingly automated decisioning. For Levchin, the strategy centers on keeping financing straightforward at checkout while the infrastructure behind it all becomes more sophisticated.