Walmart partners with Affirm to provide credit option to customers

Walmart shoppers who want a credit option for larger purchases made in stores or online will soon have another choice. The retail giant is partnering with Affirm, a financial services company that provides installment credit options at more than 2,000 merchants including Expedia and Wayfair.

Walmart said online shoppers will have the Affirm payment option for purchases made in the coming weeks when they check out at Walmart.com.

Walmart is also planning to make the credit option available on select purchases at more than 4,000 U.S. supercenters. The retailer said the Affirm experience at Walmart supercenters is designed to be transparent, seamless and integrated with a consumer’s typical shopping experience. Customers can check eligibility by following the link before they head into the store or while they shop. A decision is made in real time, without impacting their credit scores, the retailer noted in the release.

Consumers must log in to the Affirm site or app and choose the retailer and amount of credit they are seeking. They are then asked to provide their banking user name and password to allow Affirm to check for active account and income verification. Once approved, shoppers select a repayment term of 3, 6, or 12 monthly installments and are shown the exact repayment amount they’ll owe each month, with interest displayed in simple dollars rather than a hard-to-calculate interest rate.

There are no hidden or late fees, so users will never pay a dollar more than they agree to, according to Walmart. In-store shoppers will receive a unique barcode that is scanned by a store employee at the register to complete a purchase. Walmart stores in Iowa, Puerto Rico and West Virginia are not eligible to participate.

“We are focused on providing customers transparent, easy, and convenient ways to pay, and offering Affirm both in stores and online is one way to do that. Providing multiple ways to shop and finance select items with no hidden fees is an important way we deliver on our promise to help our customers save money and live better,” said Daniel Eckert, senior vice president of services & digital acceleration at Walmart.

Walmart owned brands Allswell and Hayneedle already offer the installment payment option with Affirm. Walmart said its customers will be able to select the Affirm payment option on purchases ranging from $150 to $2,000 once it becomes available. Consumers may purchase items such as electronics, home and garden, automotive, furniture and sporting goods with the Affirm option. However, groceries, alcohol, tobacco, pharmacy, personal care, firearms and money services are not eligible with the Affirm option.

Affirm makes loans through its banking partner Cross River Bank of New Jersey that is a state-chartered commercial bank and member of the FDIC.

Max Levchin, founder and CEO at Affirm, said Walmart was interested in partnering with Affirm in part because his company offers a straightforward proposition to its customers. In 2017, Walmart announced it was ending deferred interest financing on its credit cards, he noted. This past summer Walmart terminated a lengthy partnership with Synchrony Financial and signed a new deal with Capital One Financial for the consumer credit cards it offers.

He said Affirm has positioned itself as a transparent consumer lender, offers clear pricing terms, and does not charge late fees. Its loans carry annual percentage rates ranging from 0% to nearly 30%, depending on the risk presented by a particular borrower, according to the company’s website.