Walmart’s fintech venture, One, has ventured into the buy now, pay later (BNPL) space, offering loans for high-value purchases such as electronics and power tools at select U.S. stores. This move positions One as a competitor to established BNPL players like Affirm, giving Walmart customers more payment options during their shopping experience.
As reported by CNBC, One’s BNPL service, alongside Affirm, is being actively promoted to customers browsing through Walmart’s electronics section. While Affirm has been a longstanding financing option at Walmart, One’s entry into the BNPL arena signals a potential shift in the retailer’s financing strategy.
JPMorgan noted that while Affirm will continue to be available as a funding option at Walmart, the competition between Affirm and One may intensify at the point of sale. Walmart’s strategic promotion of One’s BNPL service could give it a competitive edge in capturing consumer attention and driving adoption.
Beyond traditional e-commerce transactions, BNPL providers like Affirm and One are expanding their reach into new sectors. Affirm, for instance, has extended its BNPL services to cover elective medical procedures, demonstrating the versatility of such financing options.
In partnership with retailers like Amazon and Walmart, BNPL providers facilitate customer purchases by offering installment-based financing options. These providers earn commissions on sales and interest on the loans, making BNPL a lucrative business model in the retail finance landscape.
The rise of BNPL loans has been meteoric, with $75 billion in online spending attributed to this payment method in 2023, according to Adobe Analytics. This trend underscores the growing preference among consumers for flexible payment solutions that allow them to spread out their expenses over time.
While BNPL loans are available for a wide range of products, certain items such as groceries, alcohol, and weapons are excluded from eligibility. However, customers can leverage BNPL financing for big-ticket purchases like electronics, jewelry, power tools, and automotive accessories, enhancing their purchasing power and flexibility.
One has been actively expanding its suite of financial services to attract a broader customer base. Last year, it introduced savings accounts offering a competitive 5% interest rate on balances up to $100,000, significantly higher than the national average. This move reflects One’s commitment to providing value-added financial products beyond traditional lending services.
With Walmart’s backing, One is well-positioned to leverage its vast retail network and customer base to drive adoption of its BNPL offerings. By integrating seamlessly into Walmart’s shopping experience, One aims to capture a larger share of the BNPL market and solidify its position as a leading player in the fintech space.
As the popularity of Buy Now, Pay Later (BNPL) services grows steadily among consumers, Walmart’s entry into this arena via its fintech subsidiary highlights the retailer’s dedication to providing cutting-edge financial options that align with shifting consumer preferences. By forging strategic alliances and broadening its product range, Walmart and its fintech endeavors are positioned to influence the trajectory of retail finance in the coming years.
