Affirm Holdings is leaning into the growth potential of buy now, pay later financing for professional home services such as plumbing and air conditioning maintenance, as well as other service-based businesses, the company’s financial chief said Tuesday.
“We’re seeing some good momentum in that category,” Affirm Chief Financial Officer Rob O’Hare said at a periodic “fireside chat” the BNPL provider conducts for shareholders. He noted the partnership Affirm announced last week with ServiceTitan, a software platform for in-home professional services such as plumbers and HVAC specialists.
Affirm also signed a BNPL deal last week with Vagaro, a software firm based in Pleasanton, California. Vagaro’s platform powers about 100,000 businesses such as beauty and nail salons, fitness centers and tattoo shops. The BNPL provider also added two software platforms for auto-repair businesses — Tekmetric and Shopmonkey — in the past three months.
“I think there’s just a lot to like,” about services, O’Hare said in the session moderated by a Stephens equity analyst, noting the expense of jobs such as home improvement projects and professional carpet cleaning. The average U.S. homeowner spends $8,800 per year on home improvement, according to the companies’ Sept. 16 press release.
Under the agreement, customers of contractors on ServiceTitan’s platform can split their home repair bills into biweekly or monthly payments.
“Those can be large-ticket items, and I think they’re also pretty considered purchases and something that we can help with in terms of driving affordability and smoothing the cost of those services over the course of several months for the consumer,” O’Hare said. “That’s an area that we’re seeing nice traction, and we’re pretty bullish on today.”
Services accounted for 3% of Affirm’s gross merchandise volume in the most recent quarter, the San Francisco-based company said last month in its fiscal 4Q earnings release. But services volume grew 39% on a yearly basis, surpassing six other categories, including travel, fashion and electronics.
In its overall business, Affirm offers a “broad aperture” of consumer loans, ranging from $35 to $35,000, with terms of 30 days to five years, O’Hare said.
Separately, he said Affirm and Canadian e-commerce company Shopify are beta testing in the U.K. and Canada ahead of the launch of Shopify’s Shop Pay Installments service, which Affirm also powers in the U.S. The companies have “no firm timelines” to share about when Shop Pay Installments will begin in either country, an Affirm spokesperson said Tuesday via email.
After the U.K. and Canada, Affirm and Shopify will “look to expand into continental Europe,” as part of their global growth, O’Hare said. “There's some large markets in continental Europe that make sense as a next wave.” In April, Affirm and Shopify identified France, Germany and the Netherlands as European nations for their global expansion.
Apart from Shopify, Affirm launched its BNPL services with two U.K. merchants last November, marking its entry into a major international market after Canada. Affirm expanded its Canadian business in 2020 with the acquisition of PayBright, a Toronto-based BNPL provider.
