Affirm Holdings, Inc. AFRM recently entered into an expanded partnership with auto repair technology company Tekmetric. The goal of this collaboration is to provide Tekmetric customers with flexible payment options. Eligible customers have the option to split the total cost of their purchase into manageable monthly or bi-weekly payments. This buy now, pay later (“BNPL”) option applies to both online and in-person auto repair services.
The high interest rate environment has increased the demand for BNPL services and is expected to continue in the coming days. The partnership will benefit consumers at thousands of auto repair shops using Tekmetric’s platform with an APR of up to 0%.
This initiative is designed to improve the customer experience for Tekmetric by offering transparent terms with no hidden fees or compound interest. The collaboration integrates the auto repair management solution into Affirm’s extensive network of 292,000 retail partners.
This strategic partnership is expected to increase Tekmetric’s revenue, average order value and customer loyalty. Affirm, which is already well established in the US market, will further strengthen its presence in the North American market with this latest alliance. As consumer reliance on BNPL solutions and similar services increased sharply amid high inflation, the expected stabilization of interest rates in the future could lower borrowing costs for consumers. This, in turn, could lead to further transaction growth and increase the use of AFRM’s services.
However, competition in the BNPL space is growing rapidly, with companies like Klarna and PayPal Holdings, Inc.‘s PYPL Pay in 4 is continuously increasing its market share. BNPL services also compete with traditional payment methods such as credit and debit cards offered by major financial institutions from the broader business services sector, such as Visa Inc. V and Mastercard Incorporated MA. However, the addition of additional retail partners to AFRM’s growing network will increase merchandise volumes.
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