Buy now, pay later (BNPL) giant Affirm is launching in the United Kingdom, its first market outside of North America.

Its long-awaited arrival comes as British lawmakers consider new rules to bring BNPL companies in line with other traditional consumer credit services, although such laws are not expected to come into force until at least 2026 – long enough for Affirm to gain traction and curry favor with consumers and regulators.

Founded in 2012, Affirm grew out of a startup incubator called HVF, created by the co-founder of PayPal. Max Levchin (photo above) which ended up took the reins of Affirm in 2014 to lead its commercial push. The company has expanded beyond the United States and into Canada in 2022and has entered into lucrative partnerships with major e-commerce companies over the years. Affirm is Shopify’s primary financial partner. for almost a decadenot to mention Walmartand Amazon, which chose Affirm as Amazon Pay’s first BNPL partner in the United States last year. More recently, Affirm also got the mighty Apple as a customer.

“Normalize the debt”

The BNPL model is simple: customers are invited to purchase goods on credit, repaying the debt in interest-free installments, with the BNPL provider monetizing through merchant fees. Or, when the customer may require a longer repayment period, the loan may also include interest.

The BNPL market has long on the UK regulatory radarwith the holders like Klarna And Clear payment often criticized for encouraging impulse purchases and normalize the debt. The United Kingdom’s Financial Conduct Authority (FCA) has until now had some power to control BNPL providersbut there are key exemptions, such as services that involve interest-free credit, where fixed amount agreements stipulate that debts must be repaid within 12 months.

But new rules in the works could bring BNPL companies fully in line with other consumer finance companies. The Labor government last month announcement a new BNPL consultation, with the intention of introducing regulation to “ensure that people using BNPL products receive clear information, avoid unaffordable borrowing and have robust rights when problems arise”.

It’s clear that Affirm is already working to position itself favorably with customers and the powers that be. Indeed, the company notes for the UK launch that its interest-bearing payment options will not involve compound interest. Instead, interest will be fixed and calculated entirely on the original amount borrowed.

It is also worth noting that Klarna started charging late fees in the UK last year, and this is one area where Affirm is looking to differentiate itself: it says it won’t charge late fees or any other “hidden fees”.

Face to face

The last few years have been difficult for the BNPL sector. Klarna was valued at over $45 billion in 2021, a figure that quickly fell 85% to $6.5 billion following the great post-pandemic »correction” Many companies have endured – however, news emerged last week that Klarna’s valuation increased again to $14.6 billion. It has been a period of similar turbulence for Affirm, whose ups and downs have followed a trajectory which recalls its European rival.

Following his IPO 2021Affirm saw its market capitalization reach the dizzying heights of $47 billion, but its the title took a big hitwith market capitalization falling below $3 billion last year. However, Affirm shares soared to over $13 billion in 2024, with the NASDAQ-listed company the company recently published a report a year-over-year fourth-quarter revenue increase of 48% and losses increasing from $206 million to $45 million. Levchin also predicted profitability in 2025.

We’ve known for some time that the UK would likely be Affirm’s next port of call outside the US and Canada, with the company’s chief revenue officer. Wayne Pommen recorded saying it would target markets where some of its largest existing partners are already present.

For its UK launch, it doesn’t have the same big brands it has domestically, but the fact it counts Amazon, Shopify and Apple as customers in the US means it wouldn’t not a huge effort to expand such business partnerships in the UK. For now, however, Affirm will market products such as flight booking site Alternative Airlines and payment processor Fexco, with “other UK and international brands expected to follow”.

In the lead-up to today’s launch, Affirm told TechCrunch that it has already hired around 30 employees, including Ruth Spratt which is leading the local charge, while also looking to increase its numbers until the end of the year. And similar to his the philosophy of teleworking elsewhereworkers are not tied to a particular physical hub.

The company did not confirm its upcoming growth plans in Europe or elsewhere, while saying it would “take the same disciplined approach” it has always followed for any future expansion.