On Tuesday, Affirm Holdings Inc (NASDAQ:AFRM) announced it is expanding its partnership with Walmart Inc (NYSE:WMT), sending its shares up as much as 16.1%. With their existing partnership, Walmart customers are able to purchase goods online and in stores by pre-applying for credit from the buy-now-pay-later company and then showing a barcode to a checkout sales associate. With the expansion, customers can also scan the barcode at a self-checkout kiosk.

The National Retail Federation finds that Affirm's move shows the importance of in-store shopping as U.S. holiday sales growth is expected to slow in December as well after the November slowdown. Shoppers are increasingly delaying payments as U.S. credit card balances hit record highs with the rise of defaults. financial services tech firm FIS data shows that buy now, pay later (BNPL) services make about 5% of e-commerce payments across the globe and they are expected to rise to 6% by 2026. On Cyber Monday, the number of customers opting for BNPL skyrocketed 42.5% YoY, with Adobe Analyics data showing that this mode of payment resulted in shopping sprees worth $940 million.

On Black Friday, Affirm kicked off the holiday season by partnering with e-commerce giant, Amazon.com Inc (NASDAQ:AMZ), offering payment options at checkout. With this partnership, Amazon spiced up its financial game. Together, Amazon and Affirm have set their sights set on the backbone of American commerce – small business owners. Since Black Friday, together, they offered Amazon Business customers loans from $100 to as much as $20,000, targeting sole proprietors and small businesses. The duo helped SMEs to increase their purchasing power, better manage their cash flow, as well as accelerate their growth.

Although BNPL has been increasingly popular over the past years, its appeal is strengthening further in this gloomy macroeconomic climate which is making consumers more budget-conscious who appreciate the opportunity to avoid costs and interest related with credit card purchases. But even with BNPL, the holiday spending outlook remains sluggish with concerns being strengthened with early discounts from high-end retailers like Bergdorf Goodman on New York's Fifth Avenue.