Shopify Partnership Spurs Explosive Merchant Growth for Affirm

Buy now, pay later (BNPL) provider Affirm has seen its active merchant and consumer counts skyrocket in recent months after expanding its partnership with Shopify, boosting both gross merchandise volume (GMV) and transactions.

Active merchants increased from 6,500 in the first quarter of 2020 to 102,000 as of Sept. 30, with the “substantial majority” coming from the adoption of Shop Pay Installments, Affirm said. Active customers grew 124% year over year to 8.7 million; compared to the three months that ended June 30, active consumers increased by 1.6 million, or 22%.

See also: Shopify Extends Affirm Partnership to Offer More Merchants Shop Pay Installments

“Our strong quarter once again demonstrates the continued momentum across Affirm as more people embrace the transparency, flexibility and value our solutions provide,” Max Levchin, founder and CEO of Affirm, said in the earnings release.

In the three months that ended Sept. 30, Affirm recorded $2.7 billion in GMV, up 84% year over year or 138%, excluding Peloton, the BNPL provider’s largest client. Total revenue was over $269 million, a 55% increase, and transactions per active consumer increased 8% to 2.3.

Affirm also said it is expanding its relationship with Amazon just three months after first announcing the partnership, allowing all customers to use BNPL on purchases of $50 or more. Affirm had previously only been available to select customers. The company will be Amazon’s only third-party BNPL provider in the U.S. until at least January 2023, and Affirm will be integrated into Amazon Pay’s digital wallet in the U.S.

Related news: With Walmart and Amazon Now on Board With Affirm, BNPL Gains Critical Mass to Take on Big Credit  

“During the first quarter, we continued to scale our two-sided network, delivering robust top-line growth, strong unit economics and even greater capital efficiency,” Affirm Chief Financial Officer Michael Linford said in the release. “We are seeing traction across all products and verticals, and deepening our trusted relationships with merchants and consumers alike.”

Affirm’s growth also speaks to the overall growth BNPL has seen recently, with 29 million U.S. consumers having purchased at least one product or service using the payment method in the past 12 months. Nearly two-thirds of people use BNPL because it offers them a better way to manage their spending, and 42% use it so they don’t have to worry about paying interest.

Read more: Affirm President Says Consumers Turn to BNPL for More Flexibility and Transparency

“What’s really resonating with them is this transparency, this clarity upfront that they know exactly what they’re getting,” Affirm President of Technology, Risk and Operations Libor Michalek said in an interview with Karen Webster. “They know what it’s going to mean for their pocketbook and what it’s going to mean over the longer period.”