NEW YORK—Buy-now-pay-later company Affirm is predicting demand for its short-term consumer loans to increase if interest rates stay high for an extended period, which should help its struggling bottom line, according to a new report.
As CUToday.info has reported, Affirm is one of several BNPL companies that expanded rapidly during the early days of the pandemic, driven in part by a rise in e-commerce.
“But earlier this year, the company was one of many in the technology sector to slash costs, laying off 19% of its workforce, after higher interest rates pinched consumer spending,” the Wall Street Journal noted.
Loans at POS
Affirm makes loans to customers at the point of sale, with terms ranging from six weeks to five years and payments typically available in four installments.
The company’s financial position, however, has since improved and would improve further if its forecast proves true. During the quarter ended Sept. 30, gross merchandise volume—transactions on the company’s platform, minus refunds—increased 28% from a year earlier, to $5.6 billion, according to the Journal.
Revenue increased 37%, to $496.5 million.
Affirm’s net loss, meanwhile, narrowed to $171.8 million from $251.3 million, the Journal report added.
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