Affirm Holdings, Inc. (AFRM Quick QuoteAFRM - Free Report) has recently entered into an expanded partnership deal with the auto repair technology company Tekmetric. This collaboration aims to provide Tekmetric customers with flexible payment options. Approved customers will have the opportunity to divide the total cost of their purchase into manageable monthly or biweekly payments. This buy now, pay later (“BNPL”) option will be applicable in both online and in person auto repair services.

The high-interest rate environment has increased demand for BNPL services and is expected to keep the momentum going in the coming days. As such, the partnership will benefit consumers at thousands of auto repair shops that use Tekmetric’s platform with APR as low as 0%.

This initiative is anticipated to enhance the customer experience for Tekmetric by offering transparent terms without hidden fees or compounding interest. The collaboration integrates the automotive repair shop management solution into Affirm's extensive network of 292,000 retail partners.

This strategic partnership is poised to enhance Tekmetric's sales, average order value and customer loyalty. Affirm, already well-established in the U.S. market, will further strengthen its footprint in the North American market with this latest alliance. As consumer reliance on BNPL solutions and similar services surged amid high inflation, the anticipated stabilization of interest rates in the future could lower borrowing costs for consumers. This, in turn, may drive further growth in transactions and increase the usage of AFRM’s services.

However, competition in the BNPL space is growing fast, with companies like Klarna and PayPal Holdings, Inc.’s (PYPL Quick QuotePYPL - Free Report) Pay in 4 continuously increasing their market share. The BNPL services also face competition from legacy payment methods like credit and debit cards provided by major financial institutions from broader Business Services space like Visa Inc. (V Quick QuoteV - Free Report) and Mastercard Incorporated (MA Quick QuoteMA - Free Report) . Nevertheless, adding more retail partners to its growing network will drive AFRM's merchandise volumes.