Affirm Is Expanding Buy Now, Pay Later Services for Rent Payments

Key Points

• Buy now, pay later services are booming in popularity, with a projected CAGR of 27% through 2033.  
• BNPL provider Affirm is about to start offering its services for rent payments..
• Analysts believe the stock is trading around 25% lower than where it will be in a year from now.

Over the past month, financial stocks have been getting hammered. Of the S&P 500’s 11 sectors, the group has performed the worst with a loss of 2.73%. 

With the full-year and Q4 2025 earnings season underway, the sector—which includes financial institutions ranging from banks and investment firms to insurance companies, real estate firms, and fintech companies—has seen mixed results. 

The big banks have been punished by the market despite all of them notably beating earnings per share (EPS) expectations. Asset management giant BlackRock NYSE: BLK reported an EPS beat alongside quarterly revenue growing by more than 23%. The stock is down more than 2% since.

Smaller companies in the financial services sector are hurting, too, despite strong earnings. Online bank Ally Financial NYSE: ALLY reported record EPS growth. In response, the stock slid more than 3%. 

Now, one prominent buy now, pay later, or BNPL, operator—which reports on Feb. 5—is looking to shake up both the financial sector’s recent performance as well as its own industry in a way that is likely to drive top-line growth. 

While Big Banks Bring Valuation Concerns, BNPLs Could Be a Bright Spot

The surging popularity of BNPL is hard to understate. From vacations and fast food to electronics and groceries, its usage has skyrocketed in recent years. 

Financial services firm Empower estimates that 90 million Americans used the service in 2025, with particularly high levels of adoption among Millennials and Gen Z, 48% and 44% of whom report using the on-demand loans. 

Empower also found that: 

• More than half of BNPL users are under 35, including the fastest-growing generation entering the workforce and maturing (Gen Z) and the largest living adult generation (Millennials).
• Monthly BNPL spending increased almost 21% from $201.60 in June 2024 to $243.90 in June 2025.
• Over half of Gen Z (55%) feel that BNPL helps them better manage their finances.

That popularity is poised to grow. The global market for BNPL is forecast to grow at a compound annual growth rate, or CAGR, of 27% between 2025 and 2033, according to industry consultancy firm Grand View Research. That will bring the industry’s valuation from $9.5 billion in 2024 to more than $80 billion by the end of 2033. 

What BNPL companies sell is debt. And in 2026, debt is in high demand. 

Buy Now, Pay Later Is Coming for Your Rent

On Jan. 20, it was reported that Affirm Holdings NASDAQ: AFRM will begin offering its services for those interested in using it to pay rent.

The fintech company—which is one of the largest BNPL companies with a market cap of nearly $24 billion—intends to give its customers the option of breaking up their monthly rent into two equal payments instead of a single lump sum payment, along with a 0% interest rate and no fees for making those biweekly installments.  

According to CBS News, the limited pilot program will be offered through a partnership with New York-based Esusu, the latter of which reports consumer payment information to major credit agencies. 

A representative from Affirm explained that it will be underwriting every application and only approving those that the company believes can "responsibly afford to repay." While not the first BNPL company to offer rent payment services, Affirm could see notable top- and bottom-line growth stemming from the move, continuing a streak of earnings beats that dates back to Q2 2024. 

When the company reported Q1 2026 earnings on Nov. 6, 2025,  it announced EPS of 23 cents, easily topping analyst estimates of 11 cents, with quarterly revenue rising nearly 34% year-over-year. The looming move into rental payment processing could serve as a near-term catalyst, even as a limited pilot program.

What Wall Street Thinks About Affirm Holdings? 

Since its January 2021 IPO, Affirm had not achieved profitability—until the last quarter of 2025 pushed the company into the green with net income of $59 million.

That milestone was driven primarily by a five-year average revenue growth rate of nearly 46%. 

That caught the eye of numerous analysts, with 19 of the 29 currently covering Affirm assigning the stock a Buy rating.

By consensus, AFRM receives a Moderate Buy rating with an average 12-month price target of $89.17, representing nearly 25% potential upside. Institutional ownership is about average at more than 69%, but over the past 12 months, outflows have notably surpassed inflows by a margin of $19.37 billion to $3.91 billion.

But after shares of AFRM gained more than 29% over the past year, much of those outflows could be attributed to realized gains. 

Perhaps more importantly, based on Affirm’s financial health, the stock has been in the Green Zone for more than nine months, according to TradeSmith.