Affirm Signs Booking.com as Latest Buy Now, Pay Later Partner

08.09.2023 - 05:17 / skift.com / Dennis Schaal

Affirm, the buy now, pay later vendor, now has both sides of what used to be called the online travel “duopoly” with its latest partner, Booking.com. The former duopoly, at least according to hotel industry critics, was Expedia Group and Booking Holdings.

With the Thursday announcement that Booking.com customers would see Affirm’s buy now, pay later options at checkout when they are purchasing trips, Affirm now counts several Booking Holdings brands as partners, also including Agoda, Priceline and Kayak.

Booking.com customers would view options to pay for a trip biweekly or monthly.

“Expanding our relationship with Booking Holdings enables us to provide Booking.com customers with increased access to responsible credit, given Affirm only approves purchases we believe can and will be repaid,” Affirm’s Wayne Pommel, chief revenue officer, said in a statement as part of the announcement.

Affirm boasted a 30-day delinquency rateof 2.3% as of June 30, excluding loans to Peloton customers and users of a Pay in 4 option, though 43% of its receivables were from customers with FICO credit scores lower than the 650 to 660 range, out of a maximum of 850.

Affirms rates can run from 0%, where a partner subsidizes the payment through higher than normal fees as a customer promotion, to a 36% annual percentage rate depending on the credit profile, basket size, and length of payment.

Expedia.com and sister brand Vrbo are also Affirm clients. Airbnb partnered with Klarna for buy now pay later, and the feature is currently live for booking in the U.S. and Canada.

Affirm, which offers what it calls flexible payment options across multiple sectors, from home and furniture to apparel, is increasing its footprint in travel. During an earnings call last month, the company reported that travel and ticketing (concerts/events) represented 17% of its gross merchandise value, a more than 45% year-over-year increase.

Between student loans, credit cards, and increasingly buy now pay, later plans, Americans’ debt loads are increasing. Debt.org says American household debt rose 19.4% to $16.9 trillion from 2019 to 2022.

The Atlantic argued that the Gen Z proclivity to pile on debt through nontraditional payment plans means The ‘Buy Now, Pay Later’ Bubble Is About to Burst.

Affirm President Libor Michalek doesn’t see it that way.

In a Skift interview in August, Michalek said Affirm takes customers’ total debt profiles into account, adding that Affirm wouldn’t make any money if the customer can’t repay the loan. Affirm travelers see the total cost up-front, including interest and fees. That’s different from revolving credit like credit card payments, where the consumer is charged interest depending on the size of the unpaid