As consumers seek more control over their finances, a new BNPL partnership promises convenience, clarity, and confidence.
In a move that reflects changing consumer expectations and economic realities, Affirm and Costco have officially joined forces to offer Buy Now, Pay Later (BNPL) options to shoppers on Costco’s website. The partnership, announced by Affirm in a shareholder letter on May 8, introduces a new way for customers to manage larger purchases with more flexibility and transparency.
With this collaboration, Costco members will now be able to split their payments into manageable monthly installments — all handled through Affirm, a leader in the fast-growing BNPL sector. For shoppers who qualify, this means fewer financial surprises and more control over when and how they pay for their items.
A Partnership Rooted in Shared Values
For Affirm CEO Max Levchin, the alignment with Costco is personal.
“We are proud to announce our online partnership with Costco — a brand and a retailer I have personally admired for a long time because of their unwavering commitment to customer experience and transparency,” Levchin wrote in the announcement. “It will be a privilege to deliver honest financial products to their members.”
This comment echoes the values both companies share — straightforward pricing, strong customer service, and long-term trust. In many ways, this partnership feels like a natural next step for a retailer that has long focused on delivering quality and value to its members.
The Bigger Picture: BNPL as a Driver of Loyalty
Costco’s entrance into the BNPL space isn’t entirely new. Back in 2023, the retail giant introduced Citi Flex Pay, a similar installment option available to Costco Anywhere Visa cardmembers. That move laid the groundwork for experimenting with pay-over-time models, and the new partnership with Affirm expands this functionality to a wider base of online customers, including those who may not have a Costco-branded credit card.
For Costco, the decision to deepen its BNPL offering aligns with a broader strategy: driving customer loyalty in a competitive retail environment. Flexible payment methods are no longer a nice-to-have — for many consumers, they’re an expectation.
Affirm’s Broader Expansion Strategy
Affirm has been aggressively expanding its footprint across sectors — and the Costco deal is only the latest example. In April, fashion retailer Revolve Group announced the integration of Affirm’s pay-later functionality into its checkout process. More recently, Affirm struck a deal with UATP, a global airline-owned payment network, to bring BNPL to travelers booking flights.
This isn’t just about growth. It’s about normalizing BNPL as a mainstream, responsible alternative to traditional credit cards, especially as consumer trust in those old systems wanes amid high interest rates and inflation.
BNPL in 2025: A Fast-Growing Reality
Today, the BNPL landscape looks dramatically different than it did just a few years ago. According to PYMNTS Intelligence, the U.S. BNPL market now stands at $175 billion, and adoption is accelerating. At the end of 2024, 38% of U.S. consumers reported using BNPL services, up from 24% the year before.
The reasons vary. Some consumers turn to BNPL out of necessity — to bridge the gap between paychecks or manage essential expenses. Others use it more strategically, spreading out payments for larger discretionary purchases.
Interestingly, the same research found that consumers who use BNPL by choice spend significantly more ($777 on average) than those who use it out of financial need ($576 on average). That’s a key insight for retailers like Costco: offering flexibility doesn’t just meet needs — it encourages higher engagement and greater cart value.
Financial Flexibility in Uncertain Times
In today’s economy, with inflation stubbornly high and interest rates unpredictable, consumers are looking for tools that let them plan, predict, and control their budgets.
“People want certainty — especially in an environment where, economically, things are a bit uncertain,” said Ed O’Donnell, CEO of Versatile Credit, in a March 2025 interview with PYMNTS. “Planning is important and confidence is important — and with pay later, you can create your own confidence within your own budget.”
That’s the underlying strength of this Affirm-Costco alliance. It’s not just about offering another payment method — it’s about reframing how customers think about buying big-ticket items like appliances, electronics, or bulk purchases, and doing so on their own terms.
What This Means for Shoppers
Costco members shopping online can now enjoy the convenience of:
- Monthly installment plans for qualifying purchases
- Transparent pricing with no hidden fees
- An alternative to credit cards with no compounding interest
This can make it easier for families to plan for back-to-school seasons, the holidays, or restocking home essentials without having to pay upfront — and without needing to rely on revolving debt.
Final Thoughts
The partnership between Affirm and Costco is a strong signal that BNPL has evolved from a fintech trend into a mainstream financial tool. For consumers, it represents more than just convenience — it’s about freedom, control, and peace of mind in an increasingly uncertain economy.
And for retailers? It’s a chance to build deeper loyalty by aligning with what today’s customers truly value: fairness, flexibility, and simplicity.
