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Affirm, Afterpay Cut Rewards Programs as BNPL Firms Try New Loyalty Models


As buy now, pay later (BNPL) companies tinker with different methods to drive long-term engagement, Affirm and Afterpay are rethinking their loyalty strategies.

On Monday (Feb. 5), Affirm shut down its rewards program, which offered points per BNPL purchase that could be redeemed for $5 or $10 off loans at select merchants. The FinTech company will continue to allow program participants to use their existing points until April 5.

“We’re constantly testing new features and looking for ways to improve Affirm’s products,” an Affirm spokesperson told PYMNTS in a statement. “While Affirm’s Rewards beta program will no longer be available, we are continuing to explore how we can bring a best-in-class rewards experience to our consumers.”

Afterpay, too, is making changes, although it would appear the BNPL firm is not getting out of the rewards game altogether. The company shut down its Pulse Rewards program, which has been around in some form or another since 2020, on Wednesday (Jan. 31), making remaining points no longer usable.

“Our brand-new rewards program will launch in 2024,” the company noted. “As a result, Pulse Rewards will close on [the] 31st of January 2024.”

Afterpay did not immediately respond to PYMNTS’ request for comment.

Competitor Klarna, meanwhile, appears to be continuing with its rewards program, quickly going from the norm in the space to the exception, offering points per dollar spent with the payment method, which can be redeemed for discounts at select merchants.

Affirm and Afterpay’s moves come as, across the BNPL space, leading players are turning to paid subscription models to drive ongoing engagement. Afterpay, for its part, has its invite-only Afterpay Plus Card, which charges users $5.99 a month and expands the range of merchants at which consumers can use BNPL. It enables consumers to pay in installments nearly anywhere that accepts Apple Pay, Google Pay or Samsung Pay, with certain exceptions including gambling, adult services and others.

In September, reports broke that Affirm was exploring the introduction of a subscription service called Affirm Plus, as revealed by code found in the firm’s iPhone application, with subscriber benefits including a 0% annual percentage rate (APR) on installment loans up to $2,500. The program could also, per the code, offer a higher interest rate for savings accounts, with a promised annual percentage yield (APY) of 4.75% — higher than Affirm’s current rate of 4.35%.

“We’re always exploring new ways to bring value to our consumers,” an Affirm spokesperson stated to PYMNTS in an email at the time.

Most recently, Klarna announced the launch of Klarna Plus, a subscription program charging $7.99 per month, offering waived service fees on the company’s One Time Card, double rewards points and exclusive discounts at select merchants.

Many shoppers are seeking out BNPL options. The PYMNTS Intelligence report “Tracking the Digital Payments Takeover: What BNPL Needs to Win Wider Adoption,” which drew from a survey of more than 3,100 U.S. consumers, found that 28% of consumers had used deferred payment plans in the previous three months.

Additionally, the study found that 8% were moderate users of BNPL, using it several times in that period, and 2% of consumers were heavy users, using it five times or more.

The availability of BNPL options is informing consumers’ purchasing decisions. The PYMNTS Intelligence report “The Credit Accessibility Series: BNPL’s Wide-Ranging Impact on Consumers and Merchants,” which drew from a survey of more than 3,100 consumers, found that 43% of BNPL users would delay a purchase or opt for a cheaper product if the payment option were unavailable.

“Whether you have customers who are using BNPL because they need to or because they are using it for budgeting, there are multiple ways to use it, and that’s why BNPL is so successful and why it’s here to stay,” Sezzle CEO Charlie Youakim told PYMNTS’ Karen Webster in an August interview.

Competition for shoppers’ loyalty in the space is heating up. The PYMNTS Provider Ranking of Buy Now, Pay Later apps, which ranks leading players based on a range of factors including channel coverage, downloads and use, has Zip in the top spot, followed by Klarna and PayPal (tied), with Afterpay at No. 3 and Affirm at No. 4.

Affirm and Afterpay’s recent changes to their loyalty strategies reflect the evolving landscape of the BNPL industry. The industry is witnessing a shift toward subscription models to drive long-term customer engagement. As BNPL options become increasingly popular among consumers, the competition for loyalty among BNPL providers will likely intensify.