Costco is extending its Affirm partnership to the UK, giving British members a buy now, pay later option at online checkout. The announcement came on September 15. Eligible members can split purchases into interest-free or interest-bearing monthly payments.

This is a newer relationship than it looks. The US partnership launched in 2025, not years ago, and the company says hundreds of thousands of Costco members have used it there since. That programme covers online orders from $500 to $17,500, repaid over three to 36 months. Rates there run from 10% to 36%.

What Affirm Is Offering

The pitch is the familiar one. No late fees, a repayment schedule shown before checkout, and underwriting done per transaction rather than through a revolving line.

It makes a real-time credit decision on every purchase and approves a shopper only after assessing their ability to repay. The company reports roughly 28 million users and more than 570,000 merchants worldwide. Ruth Spratt, who runs the UK business, describes it as spreading the cost of big shops “with greater flexibility, no late fees, and no compounding interest.”

For a membership retailer whose customer is a considered shopper rather than an impulse buyer, the appeal is less about converting hesitant browsers. It is about smoothing bigger-ticket purchases, the electronics, appliances and tires that do not fit neatly into one paycheck. In the US the equivalent programme runs on orders from $500 upward.

Then Amazon, Days Later

Costco was not the only UK win. Affirm went live at Amazon UK checkout this week. British shoppers get monthly installments there too, on the same no-late-fee terms. Repayments can be manual or set up as automatic debits from a bank account or debit card. There is no penalty for clearing a balance early.

Two anchor accounts inside a fortnight is a fast start. It also illustrates the limit of the strategy so far. Costco and Amazon are both US multinationals that already run Affirm at home. What has been exported is a set of existing relationships rather than a UK sales effort. The tell will be a British retailer with no US connection.

The Rules Changed in July

The regulatory backdrop is not a matter of the FCA gradually tightening. UK buy now, pay later came under full consumer credit regulation on 15 July 2026.

Providers now need authorization and the Consumer Duty applies. Lenders must run proportionate affordability checks before approving credit, including on purchases under £50, and customers get Financial Ombudsman access and Section 75 protection.

The market those rules landed on grew from £60 million in 2017 to more than £13 billion in 2024, with roughly 11 million UK adults using it. Registration for a temporary permissions regime ran through the early summer, and firms have six months from the start date to secure full authorization, so some rivals are still working through that process.

This suits Affirm more than it suits the incumbents. The UK was its first overseas market, entered under FCA authorization from the start because it offers interest-bearing credit. Interest-free products, which dominate the market, sat outside the perimeter until July. The rules moved toward how Affirm already worked.

A membership retailer helps too. Costco knows who its members are and how they spend, which is a cleaner underwriting environment than an anonymous fast-fashion checkout where the lender knows nothing about the buyer.

A Crowded Market

The UK is more contested than the market Affirm built in at home. Klarna leads by a wide margin, with Clearpay, Afterpay’s UK brand, and PayPal’s Pay in 3 both established with retailers.

Affirm is the newer, US-flavored entrant. Its distinction, no late fees and a design built around larger purchases rather than fashion and beauty splits, is real but not something UK shoppers are used to comparing yet. An anchor account like Costco is a credible way to get people trying Affirm by name rather than defaulting to whichever brand a smaller retailer offers.

What to Watch

The signal is UK-specific volume once these integrations have run a full quarter. That would be the first real read on whether the model travels outside the US.

The second is the customer mix. If regulated affordability checks push some shoppers back toward cards, the big-basket positioning matters more, because a shopper financing a £900 appliance behaves differently from one splitting a £40 order.

Fintechbits covers buy now pay later, UK consumer credit and retail payments. Nothing here constitutes financial or investment advice. All analysis represents the editorial views of Fintechbits.