18 May 2026

The Walmart-Klarna-Affirm story isn't really about who won the contract. It's about what happened after Affirm lost it.

Affirm's CEO says Walmart shoppers kept using Affirm anyway, through the Affirm card. Volume held up. That detail should make every UK lender rethink how they've been building their embedded finance strategies, because it suggests the checkout placement matters less than we assumed. If your product is good enough, customers will find a way back to it even after a retailer removes you from the default journey.

The UK BNPL market is still heavily fixated on merchant partnerships as the primary distribution model. Whoever owns the checkout owns the customer. That logic made sense in 2019. It's looking shakier now.

What Affirm appears to have built, perhaps accidentally, is a direct consumer relationship strong enough to survive losing a flagship retail partner. That's a genuinely different business from one that lives or dies by merchant contracts.

What This Means for UK Credit Brokers

For those of us building origination platforms in the UK, there are two things worth sitting with:

• Direct-to-consumer credit products with real utility can compete even when embedded access is cut off
• Retailer switching costs for BNPL providers are lower than the industry pretends, which means margin pressure is structural

Klarna hitting £1 billion in Q1 revenue with 44% growth is the headline everyone will quote. But the more durable signal is that Affirm didn't collapse when Walmart moved on. Resilience came from owning the customer relationship, not the merchant relationship.

As the FCA tightens its grip on BNPL regulation in the UK, the providers who've built genuine consumer trust and direct engagement will have something to show regulators. Those who've been riding retailer distribution without building a real brand may find the regulatory process exposes how thin their customer relationships actually are.