Costco-Affirm partnership to Launch Flexible Buy Now, Pay Later Option for Big-Ticket Online Purchases

Costco is making it easier to shop big and pay small, over time. The retail giant has partnered with Affirm to roll out a new Buy Now, Pay Later (BNPL) option for online purchases ranging from $500 to $17,500.

Unlike the familiar “pay-in-four” plans with zero interest, this new option comes with interest rates ranging from 10% to 36% APR. For example, a $500 purchase at a 20% APR over six months will come with interest, but also much more manageable monthly payments..

All payments are made through Affirm’s app or website, with the added convenience of setting up automatic payments so you never miss a due date. Costco’s move brings more purchasing power straight to your fingertips—on your terms.

Key Takeaways

• Costco and Affirm have partnered to offer Buy Now, Pay Later (BNPL) financing for online purchases between $500 and $17,500. This lets members choose customized installment plans instead of paying upfront or using credit cards.
• The plans come with interest rates ranging from 10% to 36% APR, based on the shopper’s credit profile. Payments can be spread over 3 to 36 months and are managed through Affirm’s app or website.
• This move helps Costco boost online sales by making high-ticket items like appliances and furniture more affordable. The setup is integrated into Costco.com, keeping the checkout process familiar and easy to use.
• While BNPL offers budgeting flexibility, it carries risks such as interest charges and potential credit impact from missed payments. Affirm does not charge late fees, but missed payments can still be reported to credit bureaus.

Costco-Affirm Partnership to Expand Flexible BNPL Payment Options for Online Shoppers

In early May 2025, leading fintech provider Affirm and global warehouse retailer Costco announced a landmark multi-year partnership to integrate a buy now, pay later (BNPL) option directly into Costco’s eCommerce platform. This partnership will let all Costco members defer payment on online purchases, choosing transparent, customized installment plans rather than relying on traditional credit cards.

The news, first confirmed by Affirm in a shareholder letter on May 8, 2025, marks a significant expansion of BNPL into the wholesale retail sector, reflecting broader shifts in consumer expectations around payment flexibility and eCommerce growth.

Buy now, pay later solutions have surged in popularity amid rising interest rates and inflationary pressures, providing consumers an alternative to revolving credit. As of late 2024, the U.S. The BNPL market was estimated at $175 billion, with 38 percent of American shoppers having used BNPL services, up from 24 percent the previous year. At the same time, Affirm itself has scaled rapidly: by March 31, 2025, the company reported 22 million active users and partnerships with over 358,000 merchants, underscoring the broad acceptance of installment-based payment models in the modern retail ecosystem.

Under the terms of the multi-year agreement announced on May 14, 2025, Affirm will serve as the exclusive pay-over-time provider for Costco.com in the United States. After a quick, real-time eligibility check at checkout, eligible members can choose from monthly payment plans through Affirm for orders between $500 and $17,500. Costco intends for this service to launch immediately, giving its online offerings a competitive edge in the eCommerce landscape.

Costco members shopping online simply add at least $500 of eligible items to their cart, then select “Affirm” as the payment method during checkout. Affirm conducts an instant eligibility assessment—based on a soft credit inquiry—to determine available plan options. Once approved, shoppers see a menu of installment schedules tailored to their order value, enabling them to choose the plan that best fits their budget. This seamless integration ensures that members remain within the familiar Costco.com interface throughout the process.

The new BNPL offering allows repayment over three to thirty-six months, with APRs ranging from 10 percent to 36 percent depending on the member’s credit profile and purchase amount. Unlike many financing products, Affirm imposes no hidden fees or late penalties, though missed payments may carry credit-reporting consequences. Members can manage installments via the Affirm app or website, and they have the option to set up automatic payment deductions to ensure timely repayment and avoid potential credit impacts.

For Costco, the partnership presents an opportunity to enhance customer loyalty and drive higher average order values (AOV). By offering interest-bearing installment plans, the retailer makes its large-ticket items, such as appliances, patio furniture, and electronics, more accessible, potentially reducing cart abandonment rates.

Pat Suh, Affirm’s Senior Vice President of Revenue, noted that as summer approaches, more consumers are turning to Affirm to get ready for the season, whether it’s purchasing outdoor entertaining essentials like a new barbecue or patio furniture, investing in a storage shed, or upgrading appliances. She highlighted that Costco members, in particular, understand the benefits of planning and buying in bulk. Affirm is excited to provide them with a transparent alternative to traditional credit, helping them manage larger purchases with confidence and without hidden fees.

Shoppers stand to gain greater flexibility in budgeting for significant purchases, spreading payments across pay periods rather than shouldering lump-sum costs. The transparency of Affirm’s pricing—displaying total repayment amounts and schedules up front—helps members better plan their finances. Additionally, with no late or hidden fees, consumers avoid unpredictable charges often associated with credit cards. The auto-pay feature further simplifies repayment, reducing the risk of missed installments and subsequent credit consequences.

Affirm’s collaboration with Costco reinforces its broader strategy of partnering with diverse merchants. Earlier this year, Affirm teamed up with airline-owned network UATP to provide BNPL for travel bookings and with fashion retailer Revolve Group to embed installment options at checkout. Beyond these verticals, Affirm counts eCommerce giants Amazon and Shopify, among others such as Apple, in its network of merchant partners, demonstrating the versatility and scalability of its payment platform. Meanwhile, competitors like Klarna, Afterpay, and PayPal’s Pay in 4 continue to vie for share in both digital and physical retail channels.

Despite the benefits, BNPL services have drawn scrutiny over consumer debt levels and regulatory oversight. An AP News investigation found rising consumer struggles to repay BNPL loans, with credit losses up 17 percent quarter over quarter at leading providers and concerns that financially vulnerable groups may overextend themselves. Moreover, many BNPL plans do not report on-time payments to credit bureaus, though late or defaulted installments often do, leading to “phantom debt” and potential credit score damage for users unaware of the implications.

About Affirm

Affirm Holdings, Inc. is an American financial services and technology company headquartered in San Francisco, California, founded in 2012 by Max Levchin, Nathan Gettings, Jeffrey Kaditz, and Alex Rampell, and publicly traded on the Nasdaq under the ticker symbol AFRM. Since its inception, Affirm’s mission has been to deliver honest financial products that improve lives—a guiding principle reflected in its transparent, fee-free lending solutions and commitment to consumer-friendly financing.

As of March 31, 2025, Affirm served over 22 million users and partnered with more than 358,000 merchants, processing approximately $28 billion in payments annually across the United States, Canada, and the United Kingdom. Its suite of products—including point-of-sale installment plans like “Pay in 4,” the Affirm Card debit solution, and the Affirm Money savings account—combined with strategic alliances with retailers such as Amazon, Walmart, Shopify, and Apple, and technology-driven underwriting powered by machine learning, has enabled Affirm to expand responsibly while minimizing borrower defaults.

About Costco

Costco Wholesale Corporation (Nasdaq: COST) is an American multinational membership-only warehouse club operator headquartered in Issaquah, Washington. Founded on September 15, 1983, by James “Jim” Sinegal and Jeffrey H. Brotman in Seattle, Washington, the company pioneered a high-volume, low-cost retail model offering a curated selection of national and private-label goods to businesses and individual consumers.

Costco operated 890 membership warehouses as of September 1, 2024, spanning the United States, Mexico, Canada, Asia, Europe, and Oceania. In fiscal year 2024, Costco recorded net sales of approximately $250 billion—a 5% increase year-over-year—and net income of $7.36 billion, driven by strong bulk sales and membership fee revenue. Its global membership totaled 136.8 million in 2024, supported by approximately 333,000 employees across its operations.

Conclusion

Costco’s new partnership with Affirm adds a financing option that gives members more control over how they pay for large online purchases. By offering flexible installment plans and clear terms, the service makes it easier to budget without relying on traditional credit.

While BNPL comes with interest and some risk, the integration of this option into Costco’s checkout process reflects changing expectations in how consumers want to shop and pay. As both companies continue to grow, this move strengthens Costco’s eCommerce strategy and expands Affirm’s reach into the wholesale retail space.