When Buying Now and Actually Paying Later Isn’t Enough

More people are buying now and—despite what many have feared—also paying later. Yet investors don’t seem reassured.

Buy now, pay later provider Affirm on Tuesday reported some reassuring things related to common concerns about the installment-payment business. For one, the rate of late payments is dropping. Affirm’s core measurement of payments that are delinquent by 30 days or more dropped to 2.5% at the end of March, from 2.7% at the end of December and 3.2% at the end of September. That is in contrast to the rising rate of delinquency at card lenders. Plus, Affirm has weathered rocky capital markets and increased its funding capacity from the prior quarter. In April, it closed a $400 million securitization deal that had been upsized from $250 million.