Walmart's (WMT.US) decision to "change partners" led to a significant drop in Affirm's stock price, but analysts believe the impact is manageable.

Global retail giant Walmart's (WMT.US) financial layout has shaken the market. Its supported financial app OnePay announced that Swedish BNPL giant Klarna will replace Affirm (AFRM.US) as the exclusive partner for Walmart's installment loans in the US. The news directly led to Affirm's stock falling 8.88% to $43.7 on Tuesday after a 12% plunge on Monday.

Jason Kupferberg, an analyst at Bank of America, believes the market reaction is overdone. He noted that the Walmart-related transactions accounted for only 5% of Affirm's total merchandise transactions in the past six months and contributed 2% of its adjusted revenue. "These numbers are completely manageable," he wrote in a report. "It's too early to judge whether Walmart will fully migrate its BNPL volume, even in the worst-case scenario, Affirm can still recover some losses through its own credit cards and apps."

Kupferberg emphasized his long-term bullish view on Affirm's competitiveness in BNPL. "The improvement of industry penetration and the continuous growth of e-commerce markets will continue to provide fertile soil for such financial innovations," he predicted that despite the short-term setback, Affirm's card business and diversified payment solutions will become key risk hedges.

The cooperation change is a strategic breakthrough for Klarna. The Swedish company, which just filed its IPO application with the New York Stock Exchange (stock code "KLAR") last Friday, quickly announced a deep binding with Walmart. Under the agreement, US consumers can now choose Klarna's 3-36-month installment loans for thousands of products, including electronics, home goods, and car parts, when shopping at Walmart.

It's worth noting that Walmart's cooperation with Affirm started in 2019, and this "switch" marks the retail giant's strategy adjustment in the fintech field. Klarna highlighted in the press release that its "seamless payment solutions embedded in the shopping scenario" will help Walmart further enhance consumer purchasing power.

Market observers pointed out that with Klarna's IPO process accelerating, the competition in the BNPL field is becoming increasingly intense. For investors, how to evaluate the depth of the moat of such fintech companies and the strategic choices of retail giants will become key topics.