Walmart-backed fintech One launches 'buy now, pay later' services, source says

(Reuters) -Walmart’s majority-owned fintech startup One has started offering buy now, pay later (BNPL) loans for big-ticket items like electronics and power tools at some of the retailer's U.S. stores, a source said on Tuesday.

The fintech joins peer Affirm as one of the options that Walmart customers will have when shopping at the retail giant.

The news, first reported by CNBC citing a recent visit, said ads for both One and Affirm are vying for consumer attention in the retail chain's electronics aisles.

"For the time being, Affirm will remain a funding option at Walmart but will presumably compete head-to-head with One at the point of sale (POS)," JPMorgan wrote in a note on Tuesday, adding that Walmart could push One more prominently at the POS.

Affirm has also stepped outside the competitive e-commerce market to offer BNPL services for elective medical procedures, Reuters reported earlier on Tuesday.

BNPL providers like Affirm and One partner with retailers like Amazon.com and Walmart to finance customer purchases, earning a commission on the sale and interest on the loan.

BNPL loans, which shoppers repay in a handful of installments, have been steadily gaining popularity and drove $75 billion in online spending in 2023, according to Adobe Analytics.

Customers can avail the facility to buy electronics, jewelry, power tools and automotive accessories, but items like groceries, alcohol, and weapons will not be eligible.

One has been ramping up its offerings as it tries to attract more customers. Last year, it started offering a 5% interest rate, over 12 times the national average of 0.4%, on savings accounts of up to $100,000.

(Reporting by Mehnaz Yasmin in Bengaluru and Siddharth Cavale in New York; Editing by Tasim Zahid)