Dive Brief:

• Last week, payments platform Affirm announced the launch of its app, which allows consumers to shop at nearly any store and pay for their purchases in installments, according to a company press release.

• The company noted that half of its users are millennial or Gen Z shoppers. Retailers who have partnered with the payments company have experienced up to a threefold increase in on-site conversion compared to other apps, and those who accept Apple Pay or Google Pay have also experienced a 14% increase in in-store transactions, according to the company.

• Using Affirm's underwriting system to pre-qualify users, the app allows users to shop using loans that they can "responsibly afford" and 0% and low-APR offers at notable brands, per the company's press release.

Dive Insight:

Just in time for the holidays, the firm appears to be pushing its alternative payment method for credit card averse consumers. Per findings cited by the company, 67% of consumers say they want to avoid credit cards this holiday season.

Given that much of the company's customers are Gen Z and millennial shoppers, that's not a surprising finding. Gen Z and millennial consumers have long had a complicated relationship with credit cards. 

Even though many store credit card holders regret opening such accounts, consumers, particularly younger millennials, continue to apply for in-store credit cards, but they are also the most likely to be denied those cards. This year alone, retailers such as Walmart, Sephora and Sally Beauty have created their own branded credit cards packed with customer perks. 

Affirm's competitors Klarna and Afterpay offer similar services, where consumers can pay in installments and have enlisted retailers like Toms, Asos, Levi's and Ray-Ban. Meanwhile, Affirm has been working with retailers such as Walmart and Verishop to offer its installment payment service to new customers before its app rollout. 

It remains to be seen how the broader economy and consumers' willingness to take on debt will impact this year's holiday season. Consumers are paying attention to how tariffs will affect the cost of holiday goods. While some consumers anticipate spending more this holiday season, others are tightening the reins.