Affirm, one of the major names in the burgeoning Buy Now Pay Later (BNPL) space, has agreed to acquire online return specialist Returnly for $300 million. BNPL, which enables consumers to pay for online purchases in installments, grew considerably during the pandemic when e-commerce exploded as people were confined to their homes for much of the year and many were looking for creative ways to pay after being furloughed or laid off.
Returnly’s solution enables merchants to offer instant merchant credit upon initiating a return rather than waiting for the return to be fully processed. Returnly settles the return in real time and bears the risk of any return abuse. As a result of the acquisition, merchants that enable BNPL payments through Affirm will be able to offer their customers instant return credit, according to the company’s CEO Max Levchin, a co-founder of PayPal.
“Over the last few years, alongside the rapid growth of online shopping, consumers’ expectations of accommodations for returns and exchanges have increased significantly,” said Levchin. “In 2019, Affirm invested in Returnly because we recognized their technology’s ability to help merchants remove friction from returns, drive loyalty, and retain more customers. Store credit, issued before the item is actually returned, is now a practical requirement in highly competitive segments like fashion and lifestyle.”