Affirm Faces Bank of America, JPMorgan in Debit Pay Moves
Affirm is facing a sharper challenge as JPMorgan Chase and Bank of America expand installment payment options onto debit and credit cards. Wayne Pommen, Affirm’s chief revenue officer, said the debit card-based offering is new and unique, and that the company has not really seen it much anywhere.
Four of the five largest U.S. banks now offer installment lending plans on their credit card accounts, while JPMorgan Chase has also brought the structure to debit with its Pay in 4 plan. For consumers, that widens the places where purchases can be split into smaller payments without going through a pure BNPL app.
Bank of America Adds Fixed Terms
Last week, Bank of America introduced a flexible-payment option for its credit accounts that lets cardholders replace interest payments on particular purchases with a fixed monthly fee for terms of three to 18 months. Lora Monfared, the bank’s head of consumer credit card products, said customers were looking for more structure on knowing what their monthly payment and terms would be.
Three years ago, JPMorgan Chase introduced its Pay in 4 plan for debit card purchases of $50 to $400, and it charges a $5 fee for missed or late payments. That debit-card path is the part Affirm says stands out, because banks have mostly used installment tools as a credit-card feature until now.
Debit Cards Become the Battleground
Citi introduced a flexible payment option for its credit cards in 2019, and U.S. Bank debuted a card last year that lets holders split purchases into three equal payments over three months. U.S. Bank also allows holders to extend repayment for a fee of 1.5% of the original purchase amount.
54 million Americans used a BNPL product in 2023, according to Consumer Financial Protection Bureau figures that followed a survey of Affirm, Block-owned Afterpay, Klarna, PayPal, Sezzle and Zip. BNPL loan originations rose from about 20 million in 2019 to 336 million in 2023, showing how quickly the product set has moved from a niche checkout option into a mainstream payment habit.
Affirm Faces New Pressure
About 3,900 consumers surveyed by JD Power in March showed the same direction: more than one third of U.S. adults used a BNPL product for a purchase within the past 90 days, and half of those under 40 did the same. If that usage holds, the competition is no longer just between BNPL companies; it is between BNPL apps and the card issuers that already sit at the center of consumer spending.
“The very largest banks … to the extent that they have built BNPL so far, it has been a feature of their credit card offering,” Pommen said in an interview last week. “This debit card-based offering is sort of new and unique, and we haven't really seen that much anywhere. So, we'll see how it plays out.”
