Affirm is a buy now, pay later (BNPL) lender that lets customers buy and receive products or services and pay for them in installments.
Affirm has 26.8 million active consumers and 515,000 merchants who use the platform, as of March 2026.
If you’d like to add BNPL to your ecommerce store, you can choose from several BNPL providers, including Shopify’s Shop Pay Installments, which is offered in partnership with Affirm.
This guide shares how Affirm works for both shoppers and store owners.
What is Affirm?
Affirm is a buy now, pay later company that provides third-party lending. It allows customers to pay for products or services in installments.
Affirm gives customers point-of-sale loans to be repaid over a set period and pays merchants the total amount upfront. Affirm doesn’t lend money directly but works with financing partners like Cross River Bank, Evolve, and Celtic Bank for loan services.
Affirm also has a mobile app for shopping and making payments. There’s also a Visa-branded Affirm card that lets customers shop in-store and online.
Customers who use Affirm and other BNPL companies can make scheduled interest-free payments, with various payment schedules and terms available. BNPL companies make money when they charge interest on customer loans and transaction fees to merchants.
Affirm is a legitimate and publicly traded company, with more than 90% of transactions coming from repeat customers.
How does Affirm work for consumers?
Customers sign up for an account and complete a credit check. Once approved, you can use Affirm for BNPL payment plans through eligible stores online, in-person on the Affirm app, or with the Affirm virtual card.
Here’s how it works:
Sign-up
When selecting Affirm for payment, you must enter your full name, phone number, email address, date of birth, and the last four digits of your Social Security number. Affirm uses this information to verify your identity. You must be a US resident and at least 18 years old (19 in some states).
Credit check
Affirm runs a credit check to determine whether you qualify for a BNPL loan. It performs a soft inquiry, also known as a soft pull, into your credit. Unlike a hard check, a soft pull has no impact on your credit score.
Once you take out a BNPL loan, Affirm reports your payment history to both Experian and TransUnion credit bureaus. This may take 30 to 60 days to appear on your credit report, but repayment data sent may not yet be scored by traditional credit scoring systems.
Loan approval or denial
Depending on the loan application, submissions can be approved within seconds. Sometimes Affirm needs more information, such as your income or a down payment, before you can take out a loan.
If your application is denied, Affirm sends an email explaining why. If approved, customers receive their loan terms to review, which include information about interest rates and payment schedules.
Loan repayment options
Affirm offers two flexible payment options for their point-of-sale loans:
- Pay in 4. Pay in four interest-free biweekly payments.
- Monthly installments. For larger loans, you can make monthly installments, with the flexibility to pay over 36 months.
Affirm is unavailable for purchases of less than $35. The maximum credit limit for eligible customers is $30,000.
Affirm will send payment reminders three days before each payment is due. You can view your payment history, remaining balance, and upcoming payment dates in the Affirm app.
You can pay early (before the payment due date) without any penalties or fees. You can also configure automatic payments, known as AutoPay, that authorize Affirm to debit from your selected payment method on your chosen date.
Affirm doesn’t charge fees for late payments, but missing an installment can impact your credit score. Affirm may report to credit bureaus once a payment is 30 days past due. This late payment can stay on your credit report for up to seven years.
Interest rates
The interest for monthly payments can range from 0% to 36% APR. The exact interest rate for a particular installment depends on the customer’s credit history and the financing option they choose.
Both biweekly payments and monthly payments may require a down payment. For example, at the maximum $30,000 level, qualified customers would need to make a $10,000 down payment.
Affirm doesn’t charge hidden fees or late fees. It only charges interest on the loan amount rather than compound interest.
Usage
Once customers have been approved for an Affirm loan, there are three main ways to use it:
- Partner checkouts. Customers can shop directly with brands that accept Affirm as a payment method
- Affirm app (virtual card). Customers can shop with brands that don’t have Affirm integration by using a virtual card. They can apply for a card in the app for the amount they want to spend at any store. Once approved, they’ll get a one-time use virtual card to spend within 24 hours.
- Affirm Card (in-store). Customers can buy products in-store with the Affirm card. It lets them split purchases installments when they shop with any retail store that accepts Visa as a payment method.
How does Affirm work for merchants?
There are two ways to integrate Affirm as a payment method on your online store. Shopify merchants can use Shop Pay Installments to skip the Affirm account creation process, or you can apply directly on the Affirm website. Here’s how it works:
Eligibility
To apply for Affirm, your business must meet this eligibility criteria:
- Sell directly to customers in the US, Canada, or the UK
- Use a bank account based in the US, Canada, or the UK
- Have a website in English with products priced in USD, CAD, or GBP
Affirm prohibits certain businesses from using its BNPL service. This includes businesses selling weapons, sexually oriented products, and regulated products or services like tobacco and e-cigarettes.
Application
When applying to Affirm as a merchant, you will be asked the following information about your business:
- Business email
- Business website
- Country
- Integration platform (e.g., Shopify)
- Annual revenue
- Average order value
Approval or denial
Affirm approves or denies applications within three to five business days. Once approved, you can select which financing options you want to offer.
Payment terms and fees
When customers choose Affirm as their payment method on your ecommerce store, Affirm sends the purchase amount to your business bank account through an ACH payment within one to three business days.
Affirm charges a transaction fee and merchant discount rate for every purchase. These fees depend on your company’s size and risk profile.
Offering Affirm through Shop Pay Installments
Shopify store owners can activate Affirm using Shop Pay Installments, provided you meet the eligibility requirements. The integration runs through Shopify Payments.
To offer Affirm through Shop Pay Installments:
- Go to Settings
- Click Payments
- In the Shopify Payments section, choose Manage
- Check Shop Pay Installments and press Save
When auto parts company Shock Surplus introduced Shop Pay Installments, it saw a 4% revenue increase. Adding the feature encouraged larger customer purchases, boosting the average order value (AOV) by 10%.
“Shop Pay Installments offered our customers a reliable way to upgrade confidently,” says Sean Reyes, founder and CEO of Shock Surplus. “As soon as we launched them, our AOV jumped 10%.”
How do returns work with Affirm?
To make a return for an item bought using Affirm, customers must contact merchants to return or cancel an order. If the merchant accepts the return or cancellation, refunds will be processed within three to 10 business days. Partial refunds are applied to the final bill(s) of payment plans. Refunds are irreversible.
If a customer has already made payments, Affirm will not return any interest the customer paid, and they will not refund the merchant discount rate or transaction fee after a loan has been registered.
How does Affirm work FAQ
What are the alternatives to Affirm?
Some alternatives to Affirm include Klarna, Apply Pay Later, PayPal, and Afterpay. Shop Pay Installments is offered in partnership with Affirm.
Is Affirm safe and legit?
Affirm is a legit BNPL company. Read the fine print of your agreement to ensure you’re comfortable with the payment terms, schedule, and interest rates, if any.
What are the disadvantages of using Affirm?
Disadvantages of using Affirm as a customer include:
- Interest rates of up to 36% APR on monthly installment plans
- Late payments can negatively affect your credit score
- Approval is not guaranteed
- Not available for purchases under $35
- Some purchases may require a down payment
Does Affirm affect your credit?
Affirm reports all loans and payment activity to Experian and TransUnion, but that data may not yet be factored into traditional credit scores. Late payments, however, may impact your score.
Does Affirm charge interest?
Affirm offers a 0% APR Pay in 4 option for eligible customers, though interest rates can be up to 36%, depending on your credit history and financing option.
