“Buy now, pay later” company Affirm has identified a new growth category, according to a new report from Reuters: elective medical procedures like Botox, rhinoplasties and even dental treatments.
Buy now, pay later options like Klarna and Affirm have become ubiquitous at e-commerce checkouts for some time. Klarna even had a Super Bowl commercial. But until recently, these companies focused largely on retail purchases.
Now, BNPL is moving into the medical field – a first for a major buy now, pay later company, according to the Reuters report:
Over the past year, Affirm has more than doubled the number of elective medical merchants on its network, reaching about 130 by the end of 2023. The San Francisco-based company hopes to meet growing consumer demand for financing cosmetic and dental treatments. veterinary services, medical devices and procedures. “A lot of these price points are around $2,000 and up, so that fits our installment product very well,” Pat Suh, Affirm’s senior vice president of revenue, said in an interview.
On the one hand, financing cosmetic procedures is nothing new. A plastic surgeon or dentist may offer their own financing plans and, of course, people use personal credit cards or other personal loan products for these things.
BNPL may appeal to people who don’t have a credit card, perhaps because they are young and have no credit history or have bad credit. This can be a good thing, because it gives purchasing power to those who otherwise wouldn’t have it. But BNPL apps generally don’t help people build credit. They don’t send positive payment information to credit reporting agencies, but if your account is in collections, it can negatively affect your credit score.
They can also cause these same people to trip. In 2022, a LendingTree report found that 42% of people who used BNPL had at least one late payment. And those late payment fees can start to add up.
These services can also lead young people down the wrong path, encouraging them to overspend with the lure of a seemingly low monthly payment. Business Insider recently reported that BNPL loans increased 10-fold between 2019 and 2023, creating a significant amount of “phantom debt” in the US economy because it is not typically reported to credit reporting agencies. credit.
I know: it can be hard to sympathize with someone who uses a lip filler they can’t afford by putting it on Affirm. But back to what it’s actually used for: “cosmetic treatments, dental services, medical devices, and veterinary procedures.”
This means it’s not just about lip fillers and Botox.
People who might need a root canal or crown for a chipped tooth — the kind of necessary care that can be very expensive even with dental insurance — could use Affirm. Or vet bills: Every pet owner knows the horrible choice they face if their dog or cat needs expensive surgery.
businessinsider
