Lowe’s Teams With Affirm to Build Up BNPL Business

Buy now, pay later (BNPL) provider Affirm launched a partnership with home improvement retailer Lowe’s, according to a Tuesday (Feb. 17) press release.

The collaboration will see Affirm offer biweekly or monthly payment plans to Lowe’s customers online or on the company’s mobile app, the release said. Affirm will also give Lowe’s a prominent place in the Affirm marketplace to reach more shoppers.

“From outfitting a workshop to taking on a long-planned bathroom renovation, Affirm helps Lowe’s customers confidently manage purchases with clear, transparent payment options,” Affirm Chief Revenue Officer Wayne Pommen said in the release. “This partnership is about giving customers the flexibility to invest in their homes on terms that work for them.”

The partnership is happening as BNPL services such as Affirm’s have transitioned from a checkout feature to “a line item in the monthly household budget,” PYMNTS reported Tuesday.

That is the key shift identified in “The Pay Later Ecosystem Report: Pay Later Moves into the Monthly Budget,” a February study from PYMNTS Intelligence.

The report found that installment plans on credit cards, store cards and standalone BNPL products are increasingly used to manage cash flow, rather than simply financing large or seasonal purchases.

The research found that 31% of consumers used credit card installment plans in the previous three months, while 14% used BNPL, even after a slight December pullback, which occurred despite record levels of holiday spending.

“As these tools become routine, the operational burden moves from approving the transaction to tracking due dates, balances and remaining payments,” PYMNTS reported. “The risk for providers is no longer confined to credit exposure. It is whether consumers can keep up with the administrative load that comes with fragmented payment schedules.”

Meanwhile, Affirm this month reported quarterly earnings that showed BNPL volumes up 36%, driven by the company’s zero-interest loan offering.

During an earnings call, CEO Max Levchin said Affirm’s strategy relies on clarity at checkout, even as rivals test more complicated offers.

“When Affirm says no interest, we actually mean no interest, and there’s no asterisk,” he said.

That simplicity has lessened the impact of aggressive cashback campaigns in other corners of the market, he said.