BNPL Competitive Landscape - Afterpay, Affirm, and Klarna

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BNPL Competitive Landscape - Afterpay, Affirm, and Klarna

Key Takeaways


A competitive analysis of Klarna, Afterpay, and Affirm has been presented below. The analysis details the customer/go-to-market strategy, product differentiation (competitive advantages), an overview of the BNPL offerings, user base (number of users), the average number of monthly downloads, and the marketing spend for each of the players.



  • Afterpay, like other BNPL players, has merchants as its primary customer target. The company's go-to-market strategy is first to acquire merchants through some direct mechanism.
  • Afterpay has similarities with Klarna in that both companies' target merchant is in the segment where the order value is comparatively low because its key offering is the split into 4 product. Fashion is Afterpay's big target market.
  • For the marketing channel, Afterpay partners with large retailers with well-known brands exclusively to scale customer acquisition. Afterpay has the Gap and its sub-brands in its collateral.
  • Afterpay is brandy with its positioning, and its brand tagline is "join the happily ever after."
  • Afterpay's competitive advantage relies on its global two-sided network linking consumers and retail merchants, allowing the development of a highly engaged customer base.
  • The company's BNPL offerings are interest-free offerings. Afterpay charges its customers a late fee for missed payments after an initial grace period. The customers falling behind on payments are denied access to making future payments until their debt obligations are fully settled.
  • Afterpay has approximately 10 million active users globally. There are about 5.6 million Afterpay's customers in the United States, 3.3 million in Australia, and 1 million in the United Kingdom.


  • Affirm targets merchants in the category of higher-order value items. The largest merchant that Affirm is working with is Peleton.
  • Affirm has a natural advantage over its competitors because its product is structured like a loan with the availability of up to 36 months hence favorable for longer terms.
  • The company has differentiated itself with high-value purchases. Its competitive advantages lie in its tech and risk management capabilities that allow it to "create a lot of value for merchants."
  • For the marketing channel, BNPL players enter into exclusive partnerships with large retailers with well-known brands to scale customer acquisition. Large players featuring in Affirms collateral are the largest retailer in the United States, Walmart, and the hippest fitness brand Peleton.
  • Affirm's value proposition and positioning are functional, in which they about their product being great for shoppers and business. The company's brand tagline is "more people buy with Affirm."
  • Affirm's BNPL offerings include simple-interest and interest-free installment options.
  • For missed payments, the company does not charge its customers late fees. The company locks down access to its network for customers who eventually fail to meet their obligations in smaller-value payments. Affirm reports customers who fail to make good on bigger-ticket items to a credit bureau.
  • The company's number of active consumers was 5.4 million as of March 31, 2021, a 60% increase from March 31, 2020.
  • Total mobile app downloads for Affirm for July 2021 were 300k, comprising around 200k iOS app downloads and about 100k Android app downloads.

Research Strategy

For this research on BNPL competitive landscape, we leveraged the most reputable sources of information available in the public domain, including the website, press releases, news outlets, and expert analyses. For the players whose monthly average downloads were not publicly available, the research team provided the total number of downloads for the past month. We could not find the information about the marketing spend for Klarna and Affirm on their websites. Next, we consulted the two companies' annual and quarterly financial reports for information about their marketing expenditure. Unfortunately, details about marketing expenditures were not itemized in their financial reports.

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  • "Afterpay is building a global two-sided network between consumers and retail merchants. Attracted to its free and simple instalments solution, its highly engaged customer base is funnelled through the platform as retail leads, creating a new merchant channel."
  • "To stand out, Klarna places the brand at the forefront of all touchpoints and interactions with end users and merchants."