American buy now pay later giant Affirm Inc is set to follow its largest merchant partner – Peloton Interactive – into the Australian market after establishing an operating subsidiary in Sydney.
Peloton, a New York-based fitness equipment and online exercise provider that rolled out an Australian operation in July, accounts for almost one third of Affirm’s group revenue in the US.
Affirm is an exclusive provider of instalment loans and payment deferral funding for Peloton’s customers in the US and the arrangement is expected to be emulated in Australia.
Peloton’s Australian website currently lists no BNPL product as a funding option for local customers.
However, that is set to change following Affirm’s move to establish an Australian operating entity a few months ago and registration of intellectual property with local regulators in the last week.
Affirm has enlisted support from Asian professional services and business expansion firm, Tricor Services, to help fast-track bringing the buy now pay later service to the local market.
Tricor’s Australian chief executive Richard Beattie is one of three directors of Affirm Australia Pty Ltd.
The other board members are Affirm Inc’s group chief financial officer Michael Linford and chief legal officer, Katherine Adkins.
Since listing on the NASDAQ in December last year the value of Affirm Inc’s scrip has increased threefold, giving the company a market cap of US$29.4 billion.
The company’s founder and CEO Max Levchin also co-founded the PayPal payments business.
After being contacted by Banking Day on Tuesday, an Affirm spokesperson declined to comment on the company’s strategic push into Australia.
Affirm last week reported a US$361 million expansion in revenue to US$870.4 million for the year to the end of June, but big rises in staffing and other expenses drove the business to a bottom line loss of US$430 million.
The company’s share price rallied in late August after Amazon announced it would soon offer an Affirm-branded instalment payment product to its North American customer base.
Amazon’s Australian store currently markets a buy now pay later option through Zip Co Ltd.