Buy now, pay later lender Affirm pushes into elective medical procedures

 Fintech lender Affirm has started quietly offering "buy now, pay later" (BNPL) loans for elective medical procedures, in a major push beyond its core e-commerce market, the company told Reuters.

Over the past year, Affirm has more than doubled the number of elective medical merchants on its network, reaching around 130 at of the end of 2023. The San Francisco-based company is hoping to tap growing consumer demand for financing for cosmetic treatments, dental services, medical devices and veterinary procedures.

"A lot of these price points are about $2,000 and above, so that suits our installment product... really well," Pat Suh, Affirm's senior vice president of revenue, said in an interview.

While Affirm has been adding elective medical providers since the middle of last year, it has not previously discussed or publicized its push into the sector, the first by a major BNPL provider in the U.S. market, the company said.

Affirm's installment product charges between 0% and 36%, depending on the purchase price and a borrower's credit profile.

"It's a smart growth strategy," said Ted Rossman, senior industry analyst at Bankrate, a consumer finance publisher. "They're already doing a lot with e-commerce, and that'll continue to grow, but it's always about the next big thing."

In 2022, the global market for cosmetic procedures and dental services combined was worth more than half a trillion dollars, market research firm Grand View Research estimated.

Global veterinary services were worth $124.37 billion in 2023, according to Precedence Research.

Buy now, pay later exploded in popularity as the COVID-19 pandemic forced more shoppers online.

The move into medical highlights how lenders in the space are trying to expand beyond what Affirm Chief Executive Max Levchin described to analysts in November as the "e-commerce cage."

It could also fuel concerns among regulators and advocacy groups that BNPL lending, which has grown rapidly, is leading consumers to borrow more than they can afford.

As part of the expansion, Affirm has partnered with Weave, a customer relationship management platform for small and medium-sized healthcare businesses, as a distribution partner.

BNPL providers partner with retailers like Amazon.com and Walmart to finance customer purchases, earning a commission on the sale and interest on the loan, which shoppers repay in a handful of installments. BNPL loans drove $75 billion in online spending in 2023, up 14.3% from 2022, according to Adobe Analytics.

https://finance.yahoo.com/news/buy-now-pay-later-lender-100741453.html