Affirm Stock Plummets After Negative Customer Feedback

Shares in Affirm Holdings (AFRM) experienced volatility on Tuesday following reports that Walmart (WMT) is preparing to launch its own “buy now, pay later” services, potentially impacting Affirm’s partnership with the retail giant. Affirm stock had already seen a 35% decline in 2024 prior to this latest development.

Walmart, which holds a majority stake in fintech startup One, has reportedly begun offering BNPL services for high-value items at its stores through One. This move by Walmart could pose a significant challenge to Affirm, which has been providing BNPL services at Walmart stores since 2019 and expanded its partnership with the retail giant in late 2023.

As news of Walmart’s entry into the BNPL space circulated, Affirm stock fluctuated between gains and losses while the Nasdaq composite rose. Affirm generates revenue through transaction fees from retailers and interest income from consumers, with longer-duration, interest-bearing loans accounting for a significant portion of its gross merchandise volume.

In a competitive market that includes players like Square’s Block and Afterpay, both Affirm and Afterpay have been diversifying into banking services. The evolving landscape of the BNPL industry suggests that companies will need to adapt and innovate to stay ahead in this rapidly growing sector.

Investors will be closely watching how Affirm responds to Walmart’s foray into BNPL services and how it navigates the increasingly competitive market. Stay tuned for updates on this developing story.