Affirm to offer BNPL through FIS-issued debit cards | PaymentsSource

Buy now/pay later lender Affirm and global fintech FIS are gearing up to offer pay-over-time financing to debit cards in a move that is poised to make BNPL loans even more ubiquitous. 

The new program will allow FIS’s bank clients to add biweekly and monthly payment plans to their own debit card programs, similar to the way the Affirm Card works. Banks will also be able to tap into merchant-funded financing offers such as 0% APR, longer terms and higher credit limits, according to an Affirm release. The Affirm Card allows customers to use the lenders’ BNPL products even if the company doesn’t have a direct relationship with the merchant. 

The collaboration comes as BNPL lenders seek partners to quickly build scale among consumers and merchants. The forthcoming partnership was announced Tuesday, the same day Klarna said it struck a deal with JPMorgan Payments, the largest merchant acquirer in the U.S. by payment volume, to offer its BNPL loans to JPM’s merchant network.  

Affirm will manage underwriting and servicing of the loans. The specific launch date was not specified in the release, and Affirm and FIS declined to comment further on the partnership. 

“Customer conversion and retention have become major priorities for card-issuing banks in our increasingly digitized economy, where consumers have endless options,” said Jim Johnson, co-president of banking solutions at FIS, in a statement. “This new program will deliver Affirm’s leading-edge technology, flexible and transparent payment options, and extensive merchant network to our banking clients, enabling them to continue meeting these needs and offer more competitive, differentiated services through their own banking channels.” 

For FIS, integrating BNPL into debit cards gives financial institutions a way to retain customers within their own digital ecosystem rather than losing them to other FI’s or BNPL vendors, said Ben Danner, a senior research analyst at Javelin Strategy & Research. 

“It’s a smart, innovative way to bring a very popular payment method to FI’s of all sizes,” he said. “Why download another app if I can do it all within my bank’s app?”

For Affirm, the partnership extends its reach to FIS’ “vast network” of merchants, allowing them to offer Affirm at the point of sale, Danner said. 

But it also opens up opportunities to offer BNPL on any transaction made with a debit card. That means more potential customers, which Affirm’s CEO Max Levchin has maintained is key to its march toward profitability. 

“The goal of Affirm and Klarna is to be everywhere and this ongoing battle between the two BNPL giants is indicative of the booming U.S. market for BNPL,” Danner said. 

The partnership also marks a key milestone in the democratization of pay-over-time functionality that credit card issuers have implemented by making it available to smaller issuers through their debit card program, said Aaron McPherson, principal at AFM Consulting, noting that the move into debit is notable because many smaller financial institutions do not have credit card programs. 

“It also captures transaction volume that otherwise would have gone to an Affirm partner,” he said. 

Smaller financial institutions and credit unions have been experimenting with ways to offer BNPL services and other perks to their customers and members as a way to keep spending flows in-house as other, heavy-weight credit card issuers introduce pay-over-time perks to standard credit card programs. 

Flint, Michigan-based Financial Plus Credit Union added a post-purchase BNPL offering to its debit card late last year through a partnership with label provider Equipifi, and payments fintech Prizeout has also been working closely with credit unions to develop programs focused on providing debit card rewards.

The partnership could serve to tap more affluent consumers that make purchases on their debit card, said Brian Shniderman, senior managing director and head of North American payments practice at Accenture. 

“BNPL has really taken off, but more for the mass market than the affluent,” Shniderman said. “The affluent person now, who’s a debit card person, who doesn’t really use credit other than maybe for points, now they’re like, ‘Well, I’ve got a pretty good offer, and my money’s in the market at this rate, why not keep that $2,000 or $5,000 [I’m spending] invested.” 

Affirm last quarter leaned into 0% loans to help grow its business, touting them as a great way to help increase cart sizes and help sell merchandise. 

AFM’s McPherson said he expects more partnerships between financial institutions and BNPL providers this year. 

“I expect that FIS is seeking to strike similar deals with other providers such as Klarna and AfterPay,” he said. “It seems that this is a trend for 2025; banks partnering with BNPL providers to create more integrated solutions.”