How Affirm leverages 0% interest

Low-interest and 0% APR financing are currently the strongest drivers for high-ticket retail sales. Affirm’s latest performance data shows that consumers are actively seeking interest-free options to offset the effects of inflation. For retailers, this means that subsidized financing—where the merchant pays a fee to offer 0% interest—is becoming a competitive necessity rather than a luxury. While some lenders are tightening credit or raising rates, Affirm is doubling down on these interest-free plans because they drive significantly higher conversion and larger average order values. If your business relies on monthly payments, you should evaluate whether your current lending stack prioritizes these 0% offers. The data suggests that today’s shoppers are more sensitive to interest costs than they are to the total sticker price. Offering a clear, no-interest path to purchase is currently one of the most effective ways to move inventory in a sluggish economy. Expect more BNPL providers to push these 'merchant-subsidized' models as they try to capture market share from traditional credit cards.

Source: Payments Dive

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