Affirm Card: The BNPL Baby That's Growing Up Like It Has a Cheat Code

Affirm Holdings, Inc.’s AFRM Affirm Card continues to emerge as one of its most powerful growth drivers, with management calling it a “favorite child” and highlighting its accelerating penetration. In the first quarter of fiscal 2026, Direct-to-Consumer GMV increased 53% to $3.2 billion and Affirm Card GMV surged 135% to $1.4 billion. A key catalyst was its early success with cash-flow underwriting, a method that evaluates real-time spending and deposit patterns rather than relying solely on traditional credit files.

This approach is particularly effective for younger consumers, millennials and Gen Z, who often avoid revolving credit card debt and therefore generate thin credit histories. Cash-flow data gives Affirm a deeper signal on these users’ ability to repay, enabling more approvals without pushing into riskier credit tiers. Management emphasized that while still in early testing, the method unlocks more opportunities and should support higher volume over time.

The company remains deliberately paced with marketing. Affirm has done no external marketing for the card; growth so far has come primarily from existing users. The team is gradually expanding eligibility to broader credit segments as underwriting confidence improves. Over the long run, Affirm expects the card to be offered to nearly every user in its ecosystem. It added 500,000 cardmembers in the first quarter.

Early behavioral data is encouraging: the card is capturing strong discretionary spend, starting each new cohort at a higher baseline. Affirm is also pushing more 0% APR offers, with 0% GMV on the card jumping 158%. The targets are 10 million active cards and roughly $7,500 in annual discretionary spend per card, which remain firmly in reach.

How Are Other BNPL Providers Faring?

AFRM’s peers like PayPal Holdings Inc. PYPL and Block, Inc. XYZ are also working towards increasing their BNPL footprints and capturing more market share.

In the third quarter, PayPal’s total payment volume grew 8% to $458.1 billion. Its active accounts increased 1% during this time to 438 million. PayPal’s transaction revenues gained 6% year over year in the third quarter.

Meanwhile, Block’s BNPL platform’s GMV reached $9.7 billion during the third quarter, a 17% year-over-year jump. It witnessed the BNPL gross profit jump 23% to $299 million. Block’s post-purchase BNPL options are expected to boost Cash App Card figures.

Affirm’s Price Performance, Valuation and Estimates

Shares of Affirm have gained 11.9% year to date, outperforming the broader industry but underperforming the S&P 500 Index.

Affirm’sYTD Price Performance

From a valuation standpoint, Affirm trades at a forward price-to-sales ratio of 5.10X, up from the industry average of 4.79X. AFRM carries a Value Score of F.

The Zacks Consensus Estimate for Affirm’s fiscal 2026 earnings implies a 566.7% surge year over year, followed by a 57.1% jump next year.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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