Affirm Merchant Fee Calculator

Behind the number

Affirm's merchant pricing varies with the financing term offered to the customer. Short interest-free terms cost the merchant less; longer terms and 0% APR offers cost substantially more, because the merchant is subsidising the interest the customer does not pay.

Merchant cost = order × rate + fixed, where the rate can range from a few percent to well into double digits for extended 0% financing.

A real example

A $580 order, Affirm is used more on higher-value purchases, at a 6% merchant rate: $34.80 of fee.

The same order on a 0% APR twelve-month offer at a 12% merchant rate: $69.60. The customer pays $48.33 a month and no interest; the merchant funds the difference.

Against a card at 2.9% + $0.30, $17.12, the extended offer costs $52.48 more per order. On a 55% margin that is 16% of the contribution on the sale.

The usual mistakes

The 0% offer is a promotional cost rather than a payment cost, and it is more useful to model it that way. Compared against a 12% discount it is frequently cheaper and converts better, because the customer sees the full price and a manageable payment.

The comparison against a card is therefore the wrong one. The right comparison is against whatever discount or promotion you would otherwise have run to close the same sale.

Using the result

Model extended financing against your discounting alternatives, not against card fees. A 12% merchant fee that converts a hesitant buyer at full price beats a 15% discount that does the same job.

Then restrict the longest terms to the highest-margin products. The merchant rate scales with term, and offering the longest option across a whole catalogue subsidises the thinnest-margin lines the most.

Where financing genuinely changes the decision

It works where the purchase is large enough that the total price is the obstacle rather than the value: furniture, equipment, high-end electronics, professional services. In those categories a monthly figure moves the decision from whether to afford it to whether to want it.

It does not work on low-value discretionary purchases, where the total is already affordable and the financing adds friction and cost without changing the outcome.

The threshold in most consumer categories is somewhere around $200 to $300, below which the fee buys very little. Offering financing across an entire catalogue rather than on the products where it changes the decision is the most common and most expensive way to implement it.

Financing shown only at checkout captures far less of the effect than financing shown on the product page, because the obstacle it removes is in the consideration stage rather than the payment stage.

A customer who never added the item because the price felt out of reach is not at checkout to see the option. That makes the merchandising placement, not the payment integration, the part that determines whether the fee earns anything.

One last consideration: approval rates matter as much as the merchant rate, since a declined application at checkout is a lost sale rather than a cheaper one. Asking a provider for its approval rate in your category is a fair question and the answers vary widely.