In-Store Credit Facilities: Walmart Teams up with Affirm

FACTS

  • In partnership with the financial technology company Affirm, Walmart lets customers pay for their in-store and online purchases on credit.
  • This lending offer will be among in-store payment options across the retailer’s supercentres nationwide (except in Iowa, West Virginia and Porto Rico), and well as online.
  • Customer process:
    • Customers may check whether or not they are eligible through affirm.com/shop/walmart
    • They specify their name, date of birth, e-mail, mobile phone number and the last four digits of their Social Security Number
    • A decision is made in real time, and does not impact the customer’s credit score
    • If approved, shoppers choose the repayment term (3, 6 or 12 months) and the exact amount to be repaid each month is displayed
    • For in-store purchases, a unique barcode is sent and will be scanned by a store associate to complete the transaction.
  • Eligible cart amount: from $150 to $2,000 (groceries are not eligible).

CHALLENGES

  • Featuring online and in-store payment facilities. Walmart intends to talk consumers into getting through with purchases they could otherwise have delayed.
  • Payment facilities became must have features for many retailers and stand out as a key differentiation vector in Walmart’s race to outrun Amazon, for instance.
  • As they provide US retail giants with an alternative to traditional credit cards, Affirm gains ground as a major player on an increasingly competitive sector. This start-up was founded in 2012 and scales up through reaching out for no less than 4,000 Walmart locations in the US, and targeting roughly 140 million potential customers.
  • As a matter of fact similar offers have already been featured by H&M with Klarna, Rebecca Minkoff with Afterpay, and more recently by JPMorgan Chase.

MARKET PERSPECTIVE

  • Walmart and Affirm started working on this new service over 18 months ago. For starters, it will be implemented as a payment option on Walmart.com over the coming weeks.
  • The San Francisco-based FinTech already features this option for purchases from Hayneedle and Allswell (Walmart Inc.-owned brands).
  • To date, Affirm teamed up with over 2,000 merchants including Expedia, Orbitz, Wayfair and even Cole Haan. Yet, Walmart should soon become their largest partner.

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