How does Affirm generate profit from its partnership with Peloton?

Affirm generates profit from its partnership with Peloton primarily through the interest it collects on consumer loans. When a customer chooses to finance the purchase of a Peloton bike or treadmill through Affirm, he or she agrees to pay for the product in monthly installments over a set period. While Affirm offers some loans at 0% APR, many of its financing plans include interest charges. This interest is how Affirm makes money. Furthermore, for interest-free products, Affirm may charge merchants like Peloton a fee for facilitating these loans, as it enables them to increase their sales by making their high-end fitness equipment more accessible to consumers who may not want to pay the full price upfront. The fees and the interest collected throughout these installment payment plans contribute to Affirm's profitability from the partnership.