Report: Affirm Explores Subscription Service to Diversify Revenue Sources

FinTech company Affirm is reportedly exploring the introduction of a subscription service called Affirm Plus.

The potential service aims to offer upgrades for both its buy now, pay later (BNPL) plan users and savings account holders, Bloomberg reported Thursday (Sept. 21).

It was discovered within the code of Affirm’s iPhone application, where it is not visible to users, by developer Steve Moser, who shared it with the media outlet, according to the report.

Reached for comment by PYMNTS, an Affirm spokesperson provided an emailed statement: “We’re always exploring new ways to bring value to our consumers.”

One of the key features of Affirm Plus would be the guarantee of a 0% annual percentage rate (APR) on installment loans up to $2,500, according to the report. Currently, Affirm’s payment offerings come with APRs ranging from 0% to 36%.

Furthermore, the code suggests that Affirm Plus could also unlock a higher interest rate for savings accounts, with a promised annual percentage yield (APY) of 4.75% — higher than Affirm’s current rate of 4.35% the report said. However, this rate may be subject to fluctuations based on market conditions.

The inclusion of all the mentioned features in the code and the ultimate launch of the subscription service remain uncertain, per the report.

Affirm’s exploration of a subscription service is a strategic move to diversify its revenue streams and drive user growth amid increasing competition in the BNPL and online savings markets, according to the report. CEO Max Levchin has previously expressed the company’s intention to expand beyond its current offerings.

Additionally, the potential subscription service could help Affirm offset higher funding costs resulting from rising interest rates, the report said. By broadening its revenue sources, the company aims to mitigate the impact of these increased costs. Affirm has been focusing on consumer spending in areas such as travel to counterbalance the squeeze on margins caused by higher funding costs.

During the company’s most recent earnings call, which was held Aug. 24, Levchin said the “next frontier” for BNPL is in-store commerce. He explained that “frequency is the single most important thing we can focus on in terms of just building out the network. And most people still shop in stores at least as much as online.”