Affirm, the "buy now, pay later" company, is venturing into a new territory: elective medical procedures like Botox, nose jobs, and dental treatments. This expansion marks a significant shift for BNPL services, traditionally associated with retail purchases, into the realm of healthcare.
According to a Reuters report, Affirm has been actively expanding its network of elective medical merchants, aiming to cater to the increasing consumer demand for financing options for cosmetic treatments, dental services, medical devices, and even veterinary procedures. Affirm's installment product is particularly suited for these higher-cost procedures, with many priced at $2,000 and above.
While financing cosmetic procedures is not unprecedented, BNPL offers an alternative for individuals who may not have access to traditional credit cards or favorable credit histories. However, it's worth noting that BNPL services typically do not contribute to building credit, and late payments can have adverse effects on credit scores.
Despite the potential benefits of BNPL, there are concerns about its impact on consumer behavior and financial well-being. Reports have indicated that a significant portion of BNPL users have experienced late payments, leading to accumulated fees. Moreover, the rapid growth of BNPL loans has raised concerns about the proliferation of "phantom debt" in the economy, as these loans are often not reported to credit bureaus.
While it may be tempting to dismiss the use of BNPL for cosmetic procedures, it's essential to consider its broader application. Beyond cosmetic treatments like lip fillers and Botox, individuals may rely on BNPL for essential dental care or veterinary bills, addressing urgent healthcare needs that can be financially burdensome. From root canals to pet surgeries, BNPL may offer a lifeline for those facing unexpected medical expenses.
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