Walmart-backed fintech startup One launches ‘Buy Now, Pay Later’ loans for big-ticket items

In a bid to assist struggling American consumers, Walmart’s majority-owned fintech startup One is diving into the bustling Buy Now, Pay Later (BNPL) market. The move comes as the company gears up to expand its lending services amidst the economic challenges faced by millions of Americans.

According to sources cited by CNBC, One is now offering buy now, pay later loans for big item purchases at select Walmart stores across the United States, which exceed a staggering 4,600 in number.

This maneuver positions One in direct rivalry with Affirm, the leading BNPL player, which has been the exclusive provider of installment loans for Walmart patrons since 2019. Walmart recently broadened its ties with Affirm, incorporating it as a payment choice at self-checkout kiosks, a move that helped the retail giant amass a whopping $648 billion in revenue last year.

“One’s push into lending is the clearest sign yet of its ambition to become a financial superapp, a mobile one-stop shop for saving, spending and borrowing money, CNBC reported.

CNBC reports that advertisements for both One and Affirm are clamoring for attention in Walmart’s electronics sections, as observed during a recent visit to a New Jersey Walmart outlet. At checkout, consumers can opt for offerings from either One or Affirm, with loans ranging from approximately $100 to several thousand dollars, subject to an annual interest rate between 10% to 36%, as outlined on their respective websites.

While electronics, jewelry, power tools, and automotive accessories fall under the umbrella of eligible items for BNPL loans, categories like groceries, alcohol, and weapons are excluded.

The surge in popularity of the Buy Now, Pay Later trend reflects the evolving preferences of financially strained consumers seeking alternative financing options. BNPL, characterized by instant gratification with deferred payments, has seamlessly integrated into the e-commerce landscape as a checkout choice, revolutionizing the customer purchasing journey.

According to Adobe Analytics, BNPL facilitated $19.2 billion in online spending from January through March this year, marking a 12% year-over-year surge. However, both Walmart and One have opted to remain mum on these developments, declining to provide comments to CNBC.

BNPL loans, structured around a handful of repayable installments, witnessed a substantial uptick in 2023, driving a staggering $75 billion in online expenditures, as reported by Adobe Analytics.

While consumers can leverage BNPL services for a variety of purchases including electronics, jewelry, power tools, and automotive accessories, certain items such as groceries, alcohol, and weapons are ineligible for such financing.

BNPL providers like Affirm and One forge partnerships with retail giants like Amazon.com and Walmart, earning commissions on sales and interest on loans. Affirm has even ventured beyond the fiercely competitive e-commerce sphere, extending BNPL services to cover elective medical procedures.