One, the financial technology subsidiary of Walmart (WMT), has begun offering a buy now, pay later (BNPL) option on high-priced items at select locations across its network of more than 4,600 stores in the United States.
This strategic move puts One in direct competition with Affirm (AFRM), a leading provider of BNPL services that has been Walmart’s sole provider of payment plans since 2019.
Additionally, Walmart recently expanded its partnership with Affirm by integrating it as a payment method at self-service checkout stations.
Following the announcement, Affirm’s stock value fell more than 7.7% during pre-market stock trading.
Walmart’s actions point to a potential competitive battle in the physical and digital shopping spaces involving a variety of financial institutions, including financial technology companies, credit card issuers and traditional banks.
One’s entry into the lending space marks a significant step in its goal to become an all-encompassing financial app that offers a unified mobile interface for saving money, making payments and getting loans.
The BNPL payment method has seen a rise in popularity among customers for both routine and high-value purchases. Data from Adobe Analytics shows that from January to March of the current year, BNPL processed $19.2 billion in e-commerce transactions, representing 12% growth compared to the same period the previous year.