Eye On BNPL: Affirm and Stripe Team Up, As Do Klarna And Marqeta

In a sign of buy now, pay later’s deepening penetration of digital payments, Affirm Inc. is partnering with payments-technology provider Stripe Inc. to make its Adaptive Checkout application available to Stripe clients in the United States.

Launched in 2021, Adaptive Checkout uses Affirm’s decisioning engine to offer consumers personalized bi-weekly and monthly payment options, which are based on the size of the transaction, and then make real-time underwriting decisions.

Eligible consumers will have the option to use Affirm to split purchases ranging from $50 to $30,000 into bi-weekly or monthly payments.

One benefit to Stripe users is that merchants offering Affirm at checkout see average order values rise by as much 85%, compared to other payment methods, according to the companies. In addition, businesses using Adaptive Checkout report seeing increased conversions, BNPL loan approvals, and sales compared to Affirm merchants that don’t offer Adaptive Checkout.

“More than 25% of purchases are being paid through buy now, pay later, and our conversion rate continues to improve as customers have more flexibility to purchase the products they want,” Ignacio Flores, technical lead engineer at fashion retailer Orchard Mile, an Adaptive Checkout user, says in prepared statement.

The inclusion of Adaptive Checkout in Stripe’s platform is also expected to help merchants reach new customers, increase sales, and drive growth, Affirm says.

In related news, card-issuing platform Marqeta Inc. announced Wednesday it is partnering with Klarna AB to issue the Klarna Card, which will bring Klarna’s Pay in 4 service to physical Visa cards. The card, which is currently available to U.S. consumers, will enable cardholders to pay off purchases in four equal, interest-free payments for any in-store or online purchase. 

The deal expands Marqeta’s relationship with Klarna, which began when Klarna started using Marqeta’s issuing platform in the United States in 2018 to power virtual cards across several products. More recently, the two companies expanded their partnership into 13 European markets in December 2021.

“Our U.S. customer base is growing rapidly, and we’ve seen tremendous demand for our new Klarna Card offering,” David Sykes, chief commercial officer for Klarna, says in a prepared statement. “By expanding our partnership with Marqeta, we’re leveraging their payments expertise to provide our customers with an unmatched user experience that will ultimately help our business grow.”

The announcement of the link with Marqeta comes barely more than a week after Sweden-based Klarna stunned the payments industry with an announcement that it is cutting its workforce by about 10%, or some 700 employees. Management cited multiple factors behind the decision, including the war in Ukraine, rising inflation, a volatile stock market, and expectations of a recession.