Buy now, pay later company Affirm pushes further into retail gift cards

By Arriana McLymore and Lisa BaertleinNEW YORK, Dec 12 (Reuters) - Buy now, pay later company Affirm said it is teaming up with a major provider of retail-branded gift cards to let shoppers purchase digital gift cards for the holiday season and pay for them with installment payments spread over as many as 12 months.Affirm's partnership with privately held Blackhawk Network, one of the largest distributors of retailers' pre-paid gift cards, comes as Affirm and other buy now, pay later (BNPL) firms are soaring in popularity.U.S. shoppers spent $15.9 billion from October to December using BNPL, a 17.5% increase from last year, according to Adobe Analytics. Top categories for BNPL purchases are electronics, apparel, grocery and home furniture.BNPL loans allow customers to receive items within days of ordering them online. Shoppers can typically pay in four-installments that range from monthly to biweekly increments or pay within a 30-day period.San Francisco-based Affirm announced on Tuesday that shoppers can now buy gift cards - among the most popular purchases during the holiday season - from Nordstrom, REI and Bath & Body Works with Affirm. Shoppers buy the cards through Affirm.com or its app. They can use the gift cards online and in physical stores.Affirm shoppers can purchase gift cards for between $25 and $500, depending on the retailer. Shoppers can choose four-installment payment plans for zero interest or they can opt for monthly payments that include interest rates between 0% and 36% based on credit and eligibility checks.Affirm said it has been testing its service for gift card purchases for a month. "We did have a goal of getting it tested and wrapped in time for holiday because the most popular days for gift card (purchases) are right before Christmas," Wayne Pommen, Affirm's Chief Revenue Officer, told Reuters.The gift cards essentially give Affirm a way to expand its BNPL service, which is typically marketed online, into physical retail stores. Affirm CEO Max Levchin in November told analysts that the company is expanding into other segments after being in an "e-commerce cage for a very long time."Story continuesAffirm said shoppers' total charges are provided upfront and there are no late or hidden fees. Neither Affirm nor Blackhawk would say what fees they collect from retailers participating in the program.The company isn't the first BNPL brand to allow gift card purchases. Stockholm-based Klarna also lets shoppers purchase digital gift cards through its app.Blackhawk earns revenue when shoppers activate their gift cards and collects management, transaction and technology fees from its enterprise clients who want to be on its digital gift-card mall, according to filings with the U.S. Securities and Exchange Commission. (Reporting by Arriana McLymore in New York City Editing by Mark Potter)