Affirm Finds 79% of UK SMEs Feel Pressure to Offer Flexible Checkout

Payments network Affirm released research showing that 79% of UK small and medium-sized businesses now say their customers expect checkout options beyond traditional debit cards. The survey also found that 43% of SMEs worry about their ability to compete with larger retailers as consumer payment preferences evolve.

The study, conducted by Censuswide among 500 UK SME owners and senior decision-makers in late June and early July 2026, was published 12 August to coincide with new Buy Now, Pay Later regulations taking effect in the UK. Affirm frames the results as evidence that regulatory change opens commercial opportunities for compliant flexible payment products targeting smaller merchants.

The data reveals a gap between what small businesses want and what they can deliver. Some 88% of respondents said flexible payment options such as BNPL would drive business growth, while 85% believed such options improve customer experience.

SMEs reported specific commercial benefits from flexible payments:

• 85% cited improved conversion rates
• 84% saw higher average order value
• 85% experienced increased repeat purchases

The survey release does not clarify whether these figures come from current users of flexible payment products or represent aspirational views from non-users, a distinction that affects the strength of the causal claim.

Cost and complexity remain the main obstacles. More than half of respondents (51%) expressed concern about the cost of regulation and compliance. The new UK BNPL regulatory framework brings consumer credit rules to previously unregulated deferred-payment products, adding due-diligence and disclosure requirements that smaller merchants must navigate, often without the in-house compliance resources that larger retailers maintain.

Ruth Spratt, UK country manager at Affirm, said, "Small businesses are being asked to meet the same customer expectations as the biggest retailers, often with far fewer resources. Flexible payments can help level the playing field by improving conversion, increasing order value and encouraging repeat purchases."

The survey also highlighted a preference for transparency: 77% of SMEs said it was important to offer a BNPL option that does not rely on late fees or hidden penalties. Affirm says its own product carries no late fees, a differentiator the company has emphasised consistently in its UK market positioning.

The UK Treasury's decision to bring BNPL under the Consumer Credit Act framework, anticipated for years and now in force, changes the compliance calculus for every provider in the market. Established players including Klarna and Clearpay have spent several years preparing for the regime; newer or smaller entrants face a steeper proportional burden.

For merchants, the practical effect is that they must now assess the regulatory standing of any BNPL partner before offering the product at checkout. The SME segment has historically been underserved by BNPL networks built around high-volume consumer retail.

Several providers are now competing explicitly for SME distribution, including through integration with e-commerce platforms and point-of-sale systems. Affirm, which entered the UK market from its US base and reports over half a million merchant partners globally, is using this survey to support its claim in that segment.

The research methodology is credible and the sample size reasonable for a UK SME study, though the findings should be read as advocacy research supporting a commercial launch or expansion narrative rather than independent analysis.