<bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>US-based buy now, pay later (BNPL) company Affirm reported a 55% annual increase in gross merchandise volume (GMV), reaching a value of $2.1 billion in its <a href="https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cuYWZmaXJtLmNvbS9wcmVzcy9yZWxlYXNlcy9hZmZpcm0tcmVwb3J0cy1meXEyLTIwMjEtcmVzdWx0cw/5d233c18f730436f2414784fBe86ea3e7" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url'q=https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cuYWZmaXJtLmNvbS9wcmVzcy9yZWxlYXNlcy9hZmZpcm0tcmVwb3J0cy1meXEyLTIwMjEtcmVzdWx0cw/5d233c18f730436f2414784fBe86ea3e7&source=gmail&ust=1613566682600000&usg=AFQjCNEoOsDpM5UMnPxM71WcQN6X803znQ"><u>fiscal Q2 2021</u></a> (ended December 31, 2020)marking the company's first earnings report since <a href="https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cuYmxvb21iZXJnLmNvbS9uZXdzL2FydGljbGVzLzIwMjEtMDEtMTMvYWZmaXJtLXNoYXJlcy1hbG1vc3QtZG91YmxlLWluLWRlYnV0LWFmdGVyLTEtMi1iaWxsaW9uLXUtcy1pcG8/5d233c18f730436f2414784fBcf1c6b84" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url'q=https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cuYmxvb21iZXJnLmNvbS9uZXdzL2FydGljbGVzLzIwMjEtMDEtMTMvYWZmaXJtLXNoYXJlcy1hbG1vc3QtZG91YmxlLWluLWRlYnV0LWFmdGVyLTEtMi1iaWxsaW9uLXUtcy1pcG8/5d233c18f730436f2414784fBcf1c6b84&source=gmail&ust=1613566682600000&usg=AFQjCNEB3L8W_RLkP2gTTzDMD0T7ICqC1g"><u>going</u></a> public in January 2021.</p><p><img class="center" src="https://static2.businessinsider.com/image/602bd24ab3c2a800183cce57-1432/share of US consumers who have used a BNPL service.png" border="0" alt="share of US consumers who have used a BNPL service" data-mce-source="Insider Intelligence"></p><p>The company closed out 2020 with 4.5 million active customers, representing a 52% year-over-year (YoY) elevation, while its merchant base climbed 90% annually in the same period. Taking a look at customer activity, Affirm said that its customers made an average of 2.2 transactions in the period, posting a 7% annual increase. Affirm's recent results come amid BNPL services' <a href="https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cuY25iYy5jb20vMjAyMC8xMi8xNC9idXktbm93LXBheS1sYXRlci1wbGFucy1hcmUtYm9vbWluZy1pbi10aGUtY292aWQtZWNvbm9teS5odG1s/5d233c18f730436f2414784fB99a70142" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url'q=https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cuY25iYy5jb20vMjAyMC8xMi8xNC9idXktbm93LXBheS1sYXRlci1wbGFucy1hcmUtYm9vbWluZy1pbi10aGUtY292aWQtZWNvbm9teS5odG1s/5d233c18f730436f2414784fB99a70142&source=gmail&ust=1613566682600000&usg=AFQjCNHmwvCJaLN4eiu7kaAgJ5owSBtRSg"><u>surging</u></a> popularity throughout the coronavirus pandemic as consumers lean into flexible payment options.</p><p>Despite its 2020 success, Affirm could be facing some challenges ahead as competition heats up and regulators take a closer look into BNPL services.</p><ul><li>More companies are stepping into the BNPL spacewhich might make it harder for Affirm to stand out. The market has become inundated with firms looking to cash in on the <a href="https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly9jb250ZW50LW5hMS5lbWFya2V0ZXIuY29tL2J1eS1ub3ctcGF5LWxhdGVyLXJlcG9ydA/5d233c18f730436f2414784fB83d4a4bc" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url'q=https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly9jb250ZW50LW5hMS5lbWFya2V0ZXIuY29tL2J1eS1ub3ctcGF5LWxhdGVyLXJlcG9ydA/5d233c18f730436f2414784fB83d4a4bc&source=gmail&ust=1613566682600000&usg=AFQjCNGoLscU8bPZfEwdd79ZeBc2hjC2NA"><u>BNPL wave</u></a>, including financial institutions and banks: <a href="https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cucHNjdS5jb20vcHNjdS10by1vZmZlci1pbnN0YWxsbWVudC1wYXltZW50cy1zb2x1dGlvbg/5d233c18f730436f2414784fB47bfe416" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url'q=https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cucHNjdS5jb20vcHNjdS10by1vZmZlci1pbnN0YWxsbWVudC1wYXltZW50cy1zb2x1dGlvbg/5d233c18f730436f2414784fB47bfe416&source=gmail&ust=1613566682601000&usg=AFQjCNF1qcgW0gDDXjj2ej2Am7jvaULY-Q"><u>PSCU</u></a> and <a href="https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cuZmluZXh0cmEuY29tL25ld3NhcnRpY2xlLzM2OTU5L2NoYXNlLW1vdmVzLWludG8tYnV5LW5vdy1wYXktbGF0ZXItbWFya2V0/5d233c18f730436f2414784fBde79ed6e" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url'q=https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cuZmluZXh0cmEuY29tL25ld3NhcnRpY2xlLzM2OTU5L2NoYXNlLW1vdmVzLWludG8tYnV5LW5vdy1wYXktbGF0ZXItbWFya2V0/5d233c18f730436f2414784fBde79ed6e&source=gmail&ust=1613566682601000&usg=AFQjCNFwoZtWqe3DQW-4dWMJp9jNt5ypJg"><u>Chase</u></a> are two recent examples. These types of entrants in particular could make it harder for traditional BNPL providers like Affirm to stand out because they have their existing client and customer bases to market their installment lending services to.</li><li>Global regulators are beginning to take action against BNPL providers as evidence of consumer risks involved with these offerings grows. The UK was the first to <a href="https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly9jb250ZW50LW5hMS5lbWFya2V0ZXIuY29tL3VrLWdvdmVybm1lbnQtdGFrZXMtYWltLWJ1eS1ub3ctcGF5LWxhdGVyLWZpcm1zLWxpa2Uta2xhcm5hLWNsZWFycGF5/5d233c18f730436f2414784fB67a573f6" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url'q=https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly9jb250ZW50LW5hMS5lbWFya2V0ZXIuY29tL3VrLWdvdmVybm1lbnQtdGFrZXMtYWltLWJ1eS1ub3ctcGF5LWxhdGVyLWZpcm1zLWxpa2Uta2xhcm5hLWNsZWFycGF5/5d233c18f730436f2414784fB67a573f6&source=gmail&ust=1613566682601000&usg=AFQjCNFzELlSc-KliJVGxXo_XARErnHJ_g"><u>bring</u></a> forth BNPL regulation to protect consumers from falling into debt as the offering surges in popularity throughout the country. Meanwhile, Singapore's central bank is <a href="https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly9sYXB0cmluaHguY29tL3NpbmdhcG9yZS1zLWNlbnRyYWwtYmFuay1yZXZpZXdzLWJucGwtcmVndWxhdGlvbi1vdmVyLWRlYnQtZmVhcnMtMTgxOTUzMjM2OS8/5d233c18f730436f2414784fBa6a0977c" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url'q=https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly9sYXB0cmluaHguY29tL3NpbmdhcG9yZS1zLWNlbnRyYWwtYmFuay1yZXZpZXdzLWJucGwtcmVndWxhdGlvbi1vdmVyLWRlYnQtZmVhcnMtMTgxOTUzMjM2OS8/5d233c18f730436f2414784fBa6a0977c&source=gmail&ust=1613566682601000&usg=AFQjCNEhIUaFMYq004BwNAS7LoN5Q5-B3g"><u>reviewing </u></a>its regulatory approach to BNPL offerings, indicating that restrictions might be on the way. And in Affirm's home market, US lawmakers may look to regulate the BNPL market following a <a href="https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly9jb250ZW50LW5hMS5lbWFya2V0ZXIuY29tL2J1eS1ub3ctcGF5LWxhdGVyLXNlcnZpY2VzLW1pZ2h0LWxvc2UtZ3JvdW5kLXVzLW1hcmtldA/5d233c18f730436f2414784fB74805fb1" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url'q=https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly9jb250ZW50LW5hMS5lbWFya2V0ZXIuY29tL2J1eS1ub3ctcGF5LWxhdGVyLXNlcnZpY2VzLW1pZ2h0LWxvc2UtZ3JvdW5kLXVzLW1hcmtldA/5d233c18f730436f2414784fB74805fb1&source=gmail&ust=1613566682601000&usg=AFQjCNFAPvC-6dVtARmNpezSseN8ZQgD4Q"><u>troubling</u></a> report that 40% of US consumers who have used a BNPL service have missed a payment. The growing global scrutiny may lead to operational changes that could impact Affirm's volume potential.</li></ul><p>Carving out a niche could help Affirm stand out among competition and position itself for growth if BNPL regulation comes down the pipeline. It might be beneficial for Affirm to hone in on one portion of the retail sector instead of trying to compete for overall retail market share with the plethora of other BNPL providers in the space.</p><p>For example, it could pivot its business toward the fitness and outdoor segment, which made up the majority of its business in 2020, <a href="https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cucHltbnRzLmNvbS9lYXJuaW5ncy8yMDIxL2FmZmlybS1oaXRzLTQtNW0tdXNlcnMtc2hvb3RzLWZvci1ldmVyeWRheS1wYXltZW50LWV4cGFuc2lvbg/5d233c18f730436f2414784fBad83392f" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url'q=https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cucHltbnRzLmNvbS9lYXJuaW5ncy8yMDIxL2FmZmlybS1oaXRzLTQtNW0tdXNlcnMtc2hvb3RzLWZvci1ldmVyeWRheS1wYXltZW50LWV4cGFuc2lvbg/5d233c18f730436f2414784fBad83392f&source=gmail&ust=1613566682601000&usg=AFQjCNHQkevM-YqXSeq-6EWZCaabvnpZHg"><u>according to</u></a> Affirm CEO Max Levchin. This would bode especially well for Affirm since sportswear and home fitness products have <a href="https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cubWNraW5zZXkuY29tL2luZHVzdHJpZXMvcmV0YWlsL291ci1pbnNpZ2h0cy9zcG9ydGluZy1nb29kcy0yMDIxLXRoZS1uZXh0LW5vcm1hbC1mb3ItYW4taW5kdXN0cnktaW4tZmx1eA/5d233c18f730436f2414784fBc8651eb8" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url'q=https://e.insiderintelligence.com/click/22930602.4/aHR0cHM6Ly93d3cubWNraW5zZXkuY29tL2luZHVzdHJpZXMvcmV0YWlsL291ci1pbnNpZ2h0cy9zcG9ydGluZy1nb29kcy0yMDIxLXRoZS1uZXh0LW5vcm1hbC1mb3ItYW4taW5kdXN0cnktaW4tZmx1eA/5d233c18f730436f2414784fBc8651eb8&source=gmail&ust=1613566682601000&usg=AFQjCNEvvLw2KW_0pKcoqZtwW4kayPEb8w"><u>taken off</u></a> during the pandemic.</p><p><strong><em>Want to read more stories like this one' Here's how you can gain access:</em></strong></p><ol><li>Join other Insider Intelligence clients who receive this Briefing, along with other Payments & Commerce forecasts, briefings, charts, and research reports to their inboxes each day. <a href="https://www.insiderintelligence.com/become-a-client/'IR=T&itm_source=businessinsider&itm_medium=content_marketing&itm_campaign=briefing_postr&itm_content=bottom_bullets&itm_term=enterprise_text_link-affirm-earnings-show-its-boost-from-bnpl-boom-2021-2">>> <strong>Become a Client</strong></a></li><li>Explore related topics more in depth.<a href="https://store.businessinsider.com/collections/payments-commerce'IR=T&itm_source=businessinsider&itm_medium=content_marketing&itm_campaign=briefing_post&itm_content=bottom_bullets&itm_term=store_text_link-affirm-earnings-show-its-boost-from-bnpl-boom-2021-2"> >> <strong>Browse Our Coverage</strong></a></li></ol><p><em>Current subscribers can access the entire Insider Intelligence content archive <a href="https://subscriptions.emarketer.com/">here</a>.</em></p><p><a href="https://www.businessinsider.com/affirm-earnings-show-its-boost-from-bnpl-boom-2021-2#comments">Join the conversation about this story »</a></p>
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