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The payments landscape is always evolving – now Klarna and Affirm have pivoted beyond their buy now, pay later (BNPL) foundations to offer bundled, multifunctional payment credentials.
This strategic shift is underpinned by their adoption of Visa’s Flexible Credential framework, a technology that enables consumers to switch between debit, credit, and instalment payment types within a single card, managed via app.
First Mover Advantage
Bundling Debit with BNPL
Affirm was the first mover in this space, debuting as Visa Flex’s initial partner in the US with a debit card that seamlessly converts to alternative payment modes.
Klarna followed in early June, becoming the first Flex user announced in Europe.
The company’s alignment with Visa underlines its ambition to build deeper, longer-term relationships with consumers, integrating itself into daily spending rather than remaining confined to ecommerce instalment purchases.
At Visa’s late-May product drop event, Jack Forestell, global head of product, described Flex as a “platform for innovation”, revealing that over 200 client companies globally are developing use cases spanning small business payments, multicurrency accounts, secured credit, and emerging agentic commerce models.
Yet notably absent from the roster of early adopters are major US banks, signalling a possible caution towards regulatory exposure and strategic cannibalisation of existing card products.
Flexible Credential Framework
The model itself has been likened to a rail yard, where train cars – or payments – can be shifted dynamically between tracks, i.e. funding sources, under a single credential.
Visa CFO Christopher Suh emphasised the consumer advantage in a May investor Q&A, referring to their ability to “toggle between funding sources” depending on preference or situational need.
Mastercard has introduced its own variation, One Credential, announced in February, reflecting an industry-wide recognition of the demand for unified, frictionless payment experiences.
However, Klarna and Affirm’s aggressive positioning could present a more profound threat to traditional card issuers than standalone BNPL ever did.
By embedding BNPL into debit infrastructure, they erode distinctions between spending and borrowing, potentially reducing the role of banks as primary transaction gatekeepers.
Payments consultant Peter Tapling described the concept as “pretty cool”, noting its strong appeal to sophisticated users who seek ultimate control and convenience.
Meanwhile, Richard Crone of Crone Consulting argued that this is “market validation” for the inevitable future of all-in-one accounts.
Existing models such as American Express’s “Plan It” service already allow instalment conversion after purchases, and some banks offer similar debit-to-instalment features.
The key difference with Visa Flex is that funding choices are made upfront, positioning the framework as not just an add-on but a structural reimagining of card payments.
As fintechs lead this charge, the broader competitive and regulatory implications remain significant.
Bundling debit and BNPL under a single flexible credential is not merely a feature upgrade; it is a tectonic shift in how consumers interact with money – and how issuers retain or lose their primacy in that relationship.
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