Affirm’s New AI Tool Aims to Enhance Promotional Financing

Affirm is making strides in the realm of promotional financing by testing an innovative AI tool named BoostAI. This technology is designed to help merchants optimize their promotional financing strategies through advanced A/B testing. As the popularity of 0% financing offers grows, this new tool could significantly impact both merchants and consumers.

• Key insights: Affirm is trialing an AI tool, BoostAI, enabling merchants to conduct sophisticated A/B testing of promotional financing offers.
• What’s at stake: This initiative aligns with the increasing demand for 0% financing offers, which have been effectively promoted through three-day sales events in October.
• Forward look: Currently, a select group of Affirm’s merchants, including 47 enterprise clients and numerous small to medium-sized businesses, are utilizing this tool.

Affirm is dedicated to developing an artificial intelligence platform aimed at enhancing the adoption of merchant-sponsored promotional financing rates.

BoostAI employs machine learning technology to facilitate A/B testing for promotional financing programs. The goal is to identify which promotions yield the highest conversion rates in sales. A/B testing compares the results of two options and is widely used in the tech sector to assess user preferences and experiences.

For Affirm, this platform represents a new pathway to increase merchant revenue. “It resembles more of an advertising model rather than being purely a cost of acceptance,” asserted Affirm CEO Max Levchin during the company’s recent quarterly earnings call.

BoostAI serves as a companion to Affirm’s AI-powered promotional platform, AdaptAI, which allows retailers to offer various rewards, including exclusive APR rates and special repayment terms.

The tool is currently utilized by a limited number of Affirm’s merchants, with reports of a 5% to 15% uptick in gross merchandise volume among those using it, according to the company.

“We are still in the early phases of BoostAI,” Levchin commented.

Consumer Interest in Financing Incentives

Consumers are increasingly drawn to promotional financing offers, which have proven successful for the BNPL provider and helped achieve profitability ahead of schedule. Many of these offers, particularly the 0% options, are funded by merchants and also serve as effective customer acquisition strategies.

Growth in gross merchandise volume from BNPL loans featuring 0% APR has surged by 60%, significantly outpacing Affirm’s overall growth. Approximately 60,000 merchants now support these offers, nearly quadrupling from the same reporting period last year. As of December 31, 2025, Affirm boasted around 478,000 active merchants, marking a notable 42% increase year-on-year.

According to Affirm, over 65% of loan applications included a 0% APR offer, and 39% of transactions during the quarter featured this rate.

A significant portion of Affirm’s loans—67%—is interest-bearing.

Affirm has fully embraced 0% offers, launching a three-day sales event in October, reminiscent of Amazon’s Prime Days. This “Big Nothing” sales event contributed to 15% of GMV in October, as noted by Levchin in his letter to shareholders, and significantly boosted daily signups for the Affirm Card during the event.

Affirm’s Financial Performance

Affirm announced “moderately positive” results for its second fiscal quarter ending December 31, as indicated by TD Cowen analyst Moshe Orenbuch.

Orenbuch remarked, “Revenue was markedly higher than our forecast, exceeding expectations across various categories (merchant network revenue, interest income, and gain on sale) due to robust growth within the Affirm platform.”

The company’s revenue reached $1.12 billion, reflecting a 30% year-on-year increase and surpassing analysts’ estimates of $1.06 billion, according to S&P Capital IQ. Net income rose to $129.6 million, or 37 cents per diluted share—a 61% increase—while analysts had anticipated a net income of $92.7 million, or 27 cents per share. Gross merchandise volume experienced a 36% increase, totaling $13.8 billion.

Expenses rose by 15% to $1 billion, primarily due to infrastructure costs associated with transaction growth.

As Affirm continues to refine its offerings and expand its merchant partnerships, it appears well-positioned to capitalize on current consumer trends and technological advancements in the financing market.