Cutting Rewards Programs to Grow: How BNPL Providers Hope To Drive Long-Term Engagement

February 7, 2024

Buy now, pay later (BNPL) companies are expanding their horizons when it comes to driving long-term engagement. One of their latest attempts involves changing or getting rid of their loyalty programs altogether. 

This past Monday, FinTech company Affirm shut down its loyalty program in which they offered a discount per buy now, pay later (BNPL) purchase to be redeemed by the customer at select merchants. This means consumers can no longer earn points, but they can use their existing ones until April 5.

We’re constantly testing new features and looking for ways to improve Affirm’s products(…) While Affirm’s Rewards beta program will no longer be available, we are continuing to explore how we can bring a best-in-class rewards experience to our consumers.

Affirm is not alone on this front: another notorious FinTech company, Afterpay, is also changing their loyalty programs: as of this year’s January 31st, the company shut down its Pulse Rewards program altogether, with plans to launch a “brand-new” rewards program later this year.

This change might be attributed to the latest trend across services: paid subscription programs: Afterpay’s Afterpay Plus Card, for example, charges select customers $5.99 a month, giving them the opportunity to use BNPL virtually anywhere.  

(…) It enables consumers to pay in installments nearly anywhere that accepts Apple Pay, Google Pay or Samsung Pay, with certain exceptions including gambling, adult services and others.

As for Affirm, as of September, it was revealed they are “exploring the introduction” of their very own Affirm Plus. PYMNTS summarized the benefits: 

(…)With subscriber benefits including a 0% annual percentage rate (APR) on installment loans up to $2,500. The program could also, per the code, offer a higher interest rate for savings accounts, with a promised annual percentage yield (APY) of 4.75% — higher than Affirm’s current rate of 4.35%

Even though Klarna hasn’t made moves to eliminate its existing rewards program, they are also looking to get in the “premium subscriber”game with Klarna Plus, a program that charges $7.99 a month, with benefits such as “offering waived service fees on the company’s One Time Card, double rewards points and exclusive discounts at select merchants.”

This comes after the knowledge that many consumers are seeking out BNPL options, as a recent survey found 28% of correspondents had used payment installment services in the last 3 months leading up to the survey, 8% of which were moderate users of BNPL and 2% were heavy users. In a different survey, 43% of correspondents admitted that if the option of BNPL was not available, it prompted them to seek out another cheaper product or delay the purchase. 

According to Sezzle’s CEO, Charlie Youakim, the reason why BNPL is successful and “here to stay” is because it has many uses: not being able to afford an item without spreading it throughout paychecks, and budgeting are some examples given.


There is fierce competition in the BNPL space: according to a ranking by PYMNTS, Zip takes the top spot, followed by Klarna and PayPal, Afterpay, and Affirm at the bottom.

Loyalty programs seem to be the way forward for BNPL providers, and the changes don’t seem to stop there: as the cost of life increases, more consumers are looking to use these services, which leads us to the conclusion that the competition is just heating up, and surely more FinTech companies will join the BNPL provider ranks. 

Want to learn more? Check out PYMNT’s full write-up here.

Do you use BNPL? Share your thoughts on our LinkedIn page.

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