Walmart Credit Card Installment Loans May Soon Be Available

Walmart could soon provide its customers with a new payment option, thanks to a potential deal between the retailer and finance company Affirm, Inc. Sources familiar with the situation told The Wall Street Journal that executives from Affirm are speaking with the Walmart team about the possibility of offering installment loans to customers for select brick-and-mortar and purchases.

The deal, which could roll out in test markets as early as this autumn, would allow Affirm to provide installment loans for more expensive Walmart products, particularly those with price tags above $200, the sources told WSJ. If put into place, the installment loans would provide Walmart customers with a new way to make payments over time, in addition to the existing option of Walmart-branded credit cards.

Walmart credit cards have been exclusively issued by Synchrony Financial since 2000.

While Walmart credit cards typically offer variable annual percentage rates (APRs) between 17.9 and 23.9 percent, Affirm offers installment loans with fixed APRs in the range of 10 to 30 percent, which can vary based on the applicant’s credit score. In addition, Affirm hasn’t been known to require late fees, while the Walmart cards from Synchrony charge fees as high as $38 for late payments.

Because Affirm is more likely to extend credit to customers with limited credit histories, a deal with the company could allow Walmart to gain business from consumers who aren’t able to qualify for Synchrony-issued Walmart credit cards. This could potentially boost sales for the retailer, which has seen U.S.-based same-store sales growth for the past 12 consecutive quarters. Walmart is continuing to innovate in an attempt to stave off competition from its biggest rival, eCommerce giant Amazon.

Affirm, which already offers financing to consumers who buy products from online retailer Wayfair, is headed by computer scientist and internet entrepreneur Max Levchin, one of the original co-founders of online payment firm PayPal.