The partnership, announced Thursday (July 27), lets the air carrier’s customers use Affirm’s buy now, pay later (BNPL) offering to purchase tickets and pay for them in installments.
When selecting Affirm at checkout, Cathay Pacific customers can divide the cost of any flight into bi-weekly or monthly payments, for as low as 0% APR. Affirm says customers get the total cost of their purchase upfront and never pay more than that agreed-upon price.
“Customers have been asking for more flexibility when it comes to payment options, and this partnership with Affirm delivers a simple and easy-to-use flexible payment option,” Richard Jones, Cathay Pacific’s vice president of marketing and sales, Americas, said in the announcement.
The partnership is happening as consumers shift their BNPL spending from goods to experiences, something illustrated by Affirm’s earnings report in May.
“Travel remains a key area of strength, where that category saw volume growth of 62% as consumers leverage BNPL to buy experiences instead of electronics or sporting goods,” PYMNTS wrote in its coverage of the sector this spring.
At the same time, Affirm’s management noted on the company’s earnings call that demand for discretionary goods had been “tepid.” Consumer electronics spending fell 8% year over year, while the home/lifestyle category declined 10%, and sporting goods and outdoors category was down 48%.
Renaud Laplanche, co-founder and CEO at Upgrade, said in an interview with PYMNTS’ Karen Webster that the travel vertical serves as a runway to expansion, adding to Upgrade’s consumer base of 2.5 million. Uplift reaches 3.3 million customers in partnership with more than 300 airlines, cruise lines and hotel chains in North America.
“It’s a great addition for us,” Laplanche said, “and the demographics are almost identical.” The typical Upstart/Uplift customer, he said, is in their late 30s, or early 40s, with a credit score of 700 and a higher-than-average income.
The initial plan is to make travel more affordable for consumers, with the sector already marked by $450 billion in annual consumer spending, said Laplanche. But the greater greenfield opportunity is to eventually expand BNPL into other verticals where Upgrade already operates, such as home improvement.