Affirm and Shopify have launched Shop Pay Installments in Australia, expanding their global partnership to the region. The service allows Australian merchants on the Shopify platform to offer customers flexible payment options with no late fees.

The launch marks Affirm’s return to Australia. Shop Pay Installments is powered exclusively by Affirm and integrates directly with the Shop Pay button. It enables eligible shoppers to split purchases into fortnightly or monthly payments.

Product Features

Shoppers can choose from interest-free or interest-bearing payment plans if approved. Affirm underwrites every transaction individually, making real-time credit decisions based on repayment ability. The company charges no late fees, account fees, or compounding interest.

Global Context

Shop Pay Installments has been available in the US, Canada, and the UK since 2021. Millions of shoppers have made billions of dollars in purchases through the platform. In North America, more than 90% of Affirm purchases come from repeat customers.

Shopify states that Shop Pay is adopted by over 250 million buyers globally. The integration allows merchants to switch on the feature via the Shopify admin dashboard.

Executive Commentary

Nitin Kashid, Australia Country Manager at Affirm, noted that Australians helped shape the Buy Now, Pay Later sector. He stated that the new offering provides flexible terms and no late fees ever.

Rohit Mishra, VP of Product, Payments & Cross-Border at Shopify, said the partnership helps merchants meet consumers where they are. He highlighted that the option unlocks flexibility and choice for Australian shoppers.

Affirm Holdings Inc (NASDAQ: AFRM) prepares to release its fiscal second-quarter earnings for the period ending June, with analysts projecting revenue growth of 26.2% to $1.11 billion. The buy now, pay later lender faces scrutiny over credit quality metrics following competitor Klarna’s recent disclosure of deteriorating loan performance in Germany.

Shares of Affirm were trading at $77, down 11.6% from their high for the year, as investors await clarity on the company’s growth trajectory and delinquency trends. The upcoming report follows a quarter where Affirm posted a 33% revenue jump to $1.03 billion and a 35% rise in gross merchandise volume to $11.6 billion.

Analyst Estimates and Peer Context

Analysts expect Affirm’s earnings per share to climb to $0.82 in the current quarter, up from $0.53 in the second quarter of fiscal 2025. This projection comes despite the company missing estimates in each of the last three quarters. The market is closely watching how Affirm’s US-centric model performs relative to Klarna, which reported a 27% revenue increase to $1.04 billion but saw its stock fall to a five-month low due to sharp deterioration in its largest volume market, Germany.

Credit Quality and Delinquencies

Beyond top-line figures, investors will focus on delinquency data and allowance for credit losses. In the most recent report, delinquencies rose slightly, partly attributed to a reduced denominator following tax refund seasonality. The allowance for credit losses as a percentage of loans held for investment increased to 6%, signaling heightened caution in lending standards or risk assessment.

What the Numbers Show

The divergence between Affirm’s consistent revenue growth and its repeated misses on analyst estimates suggests that while top-line expansion remains robust, cost management or margin pressures may be outpacing consensus expectations. Additionally, the rise in the allowance for credit losses to 6% coincides with slight increases in delinquencies, indicating that credit risk is becoming a more material factor in the company’s financial profile even as gross merchandise volume expands.

Technical Outlook and Analyst Targets

Technical analysis indicates a symmetrical triangle pattern forming after a bullish breakout, potentially signaling a bullish pennant formation. The stock has remained above the 100-day Exponential Moving Average and is forming a multi-month inverted head-and-shoulders pattern. Analysts maintain a bullish outlook, with BMO Capital Markets raising its target to $86, Truist to $83, and Cantor Fitzgerald to $88, aligning with the average analyst target.