Virgin Media O2, one of the United Kingdom’s leading mobile providers, is expanding its device financing options through a new partnership with Affirm, a flexible payment network. The collaboration, announced on , will allow O2 customers to access pay-over-time options when purchasing mobile phones, headphones and gaming consoles, among other hardware.
The partnership addresses a growing consumer demand for flexible payment solutions, particularly in the context of increasingly expensive technology. Affirm will provide a range of monthly payment plans, differentiating itself from traditional credit options by explicitly stating that customers will not be charged late or hidden fees, nor will they incur compound interest. Approved customers will see their financing options, including the total cost, clearly displayed at the point of sale.
This move also positions Virgin Media O2 to potentially expand into the SIM-free device market, complementing its existing Pay Monthly Handset Bundles and SIM Only plans. The arrangement provides “optionality” to broaden its customer base and cater to those who prefer to own their devices outright but still benefit from installment payments, according to the companies.
“We want to help our customers access the devices they want with an affordable, clear and convenient payment option that truly works for them,” said Chris Bournés, Commercial Director at Virgin Media O2, in a company statement. “Through our partnership with Affirm, we’ll do just that – empowering our customers by giving them even more choice to pay for their handset via a flexible service they can trust, with no hidden costs or late fees.”
Affirm’s entry into the UK market, beginning in , signaled its intention to replicate its success in the United States and Canada, where it had already processed over $75 billion in transactions over the preceding five years. The company emphasized its commitment to “responsible credit options that truly put consumers first” and “honest finance” as key tenets of its UK expansion.
Ruth Spratt, UK Country Manager at Affirm, echoed this sentiment, stating that Virgin Media O2’s reach across the UK makes it an ideal partner. “We’re proud to partner with them to bring our honest, flexible and longer pay-over-time options to more customers,” she said.
The rollout of these flexible payment plans is subject to regulatory approval and is expected to be available to Virgin Media O2 customers later this summer. Affirm is already authorized and regulated by the Financial Conduct Authority, providing a degree of assurance regarding compliance and consumer protection.
The partnership arrives as Affirm demonstrates strong growth in its overall business. The company reported a 36% year-over-year increase in gross merchandise volume during its fiscal second quarter, reaching $13.8 billion. This growth underscores the increasing consumer appetite for buy now, pay later (BNPL) services and Affirm’s ability to capitalize on this trend.
The BNPL market has experienced significant expansion in recent years, driven by factors such as rising inflation and a desire among consumers to spread the cost of purchases. However, the sector has also faced increased scrutiny from regulators concerned about potential risks related to debt accumulation and consumer protection. Affirm’s emphasis on transparency – specifically, the absence of late fees, hidden charges, and compound interest – is likely intended to address these concerns and position itself as a responsible provider in the UK market.
The collaboration between Virgin Media O2 and Affirm represents a strategic move for both companies. For Virgin Media O2, it’s a way to enhance customer choice and potentially attract new subscribers. For Affirm, it’s a significant partnership that expands its reach in a key European market and validates its business model. The success of this venture will likely depend on consumer adoption and the ability of both companies to navigate the evolving regulatory landscape surrounding BNPL services.
The move also reflects a broader trend within the telecommunications industry towards offering more flexible financing options. As smartphone prices continue to rise, carriers are increasingly seeking ways to make devices more accessible to a wider range of customers. This partnership with Affirm allows Virgin Media O2 to compete more effectively with other providers offering similar financing solutions.
