Michael Linford, Chief Operating Officer of Affirm (NASDAQ: AFRM), addressed the growing popularity of pay later products.
With the pay later / flexible payments sector making headlines—driven by competitive shifts and partnerships—Linford has outlined what sets Affirm apart from other pay over time fintech players.
The update emphasizes the company’s commitment to transparency and engagement while shedding light on the distinct business models shaping the buy now, pay later (BNPL) landscape.
The timing of Linford’s remarks has aligned with a number of important developments in the BNPL space.
Just days earlier, on March 25, Affirm announced a new partnership with JPMorgan Chase, enabling U.S. merchants on JPMorgan’s payment network to offer Affirm’s pay-over-time loans at checkout, with terms ranging from 30 days to 60 months.
This move followed news of rival Klarna unseating Affirm as Walmart’s exclusive BNPL provider, a shift that sent Affirm’s stock tumbling over 13% in two days before a partial rebound.
Against this backdrop, Linford’s commentary and insights serve as both a strategic clarification and a reaffirmation of Affirm’s current position.
At the heart of Affirm’s differentiation, Linford argues, is its business model.
Unlike some competitors, Affirm generates revenue through a balanced mix of merchant fees, interest on loans, and its growing Affirm Card—a debit card with BNPL functionality that now boasts 1.7 million users.
This diversification contrasts with firms that rely heavily on one revenue stream, such as merchant fees alone.
Linford notes that Affirm’s approach allows it to maintain flexibility and resilience, even as market dynamics shift.
For instance, in its fiscal Q2 2025, Affirm reported a 47% year-over-year revenue increase to $866 million, fueled by a 138% surge in gains from loan sales, a 42% rise in interest income, and a 33% jump in network revenue.
Another key distinction lies in volume mix and customer focus.
Affirm’s network spans over 335,000 merchants, from travel platforms like Hotels.com to tech giants like Shopify, where it remains the exclusive BNPL provider for Shop Pay Installments in the U.S. and Canada.
Linford emphasizes that Affirm prioritizes “superior performance and maximum value” for merchants, leveraging advanced underwriting and capital markets expertise.
This contrasts with competitors like Klarna, which has a more global footprint but recently intensified its U.S. push with its Walmart deal and an impending IPO.
Affirm’s U.S.-centric strategy, Linford suggests, allows for deeper integration and tailored solutions, such as its recent expansion into the UK with Alternative Airlines.
Linford also hints at differences in operational practices, though he stops short of naming any specific competitors.
Affirm’s commitment to transparency—offering clear payment schedules with no hidden fees—stands out in an industry where some players have faced scrutiny over consumer debt risks.
The COO underscores that Affirm’s model is built for sustainability, not just scale, a nod to its shift from a net loss to a $0.23 per-share profit in Q2 2025.
As the pay later space evolves, Affirm’s leadership sees its blend of innovation, merchant trust, and financial discipline as a strategic business model—one that investors and partners should note amid the BNPL industry’s ongoing transformation.