Amazon Expands UK BNPL Footprint With Affirm Partnership

Amazon is teaming with Affirm to offer installment payment options to its U.K. customers.

The partnership, announced Wednesday (Sept. 23), lets customers choose Affirm as their payment method at checkout and apply to get an instant eligibility decision from the buy now, pay later (BNPL) provider.

“We want to give Amazon customers genuine choice and flexibility over how they pay,” said Vassil Gedov, general manager of payment products for Amazon EU. “With Affirm’s financing options, we are delivering a simple and convenient way for Amazon customers to manage spending with clear terms and no late fees, all integrated into the Amazon shopping experience our customers already know and trust.”

Approved customers will be able to pay for purchases of at least 50 pounds (about $66) either in three interest-free installments over three months, or through a 48-month interest-bearing option.

The new financing options will be rolled out progressively to eligible customers on Amazon’s U.K. website in the weeks ahead, and do not apply to categories including gift cards, groceries, out-of-stock items, and certain digital content like music, videos, Kindle books, apps, and game downloads, the release said.

PYMNTS spoke earlier this week with Affirm President Libor Michalek about the company’s new underwriting model, and how it improves on older models.

The new model approves customers the older version would have declined, including those with limited credit histories and no FICO score at all, Affirm said in an announcement exclusively shared with PYMNTS.

What the older models were missing, Michalek said, was time.

“The time dimension of multiple purchases, multiple credit events in a customer’s life wasn’t being represented with particularly high fidelity,” he told PYMNTS CEO Karen Webster.

In other words, earlier models were good at recording what happened, but had a tougher time with when it happened and what came next. Affirm’s new model uses the company’s years of lending history and employs transformer technology, the same kind behind large language models, to add the proper chronology to a customer’s credit story.

“Michalek gave Webster an easy way to think about it,” the report said. “Take 10 applicants an older model would turn down. It declines all of them because it can’t tell which ones will get in over their heads. A better model might spot five who can repay. The other five still get a no. The bar didn’t move. Affirm can now see who clears it.”

For those five customers, that’s credit they would have been denied, which is something a lot of subprime and near-prime consumers can relate to. For Affirm, it’s five customers it was turning away.