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Fintech’s relief rally is already losing steam.
Shares of Affirm, Toast, Bill.com, PayPal and other consumer-focused fintech firms turned lower Thursday.
The retreat followed a powerful bounce Wednesday after President Donald Trump announced a 90-day pause on dramatically higher import tariffs.
While the administration simultaneously escalated duties on Chinese goods to 125%, markets took the broader delay as a sign that Washington may soften its stance — at least temporarily — on the more disruptive elements of its trade agenda.
The sector still faces longer-term risks, from rising hardware costs to small business credit exposure and macro uncertainty.
Affirm led the rebound on Wednesday. The buy now, pay later firm closed Wednesday up nearly 22%, clawing back steep losses from earlier in the week. Shares plunged after the initial tariff news rattled growth stocks and sparked fears of a consumer spending slowdown. But the rollback, combined with an upbeat analyst note, helped flip the narrative.
Ahead of the market rally on Wednesday, Evercore ISI analyst Adam Frisch initiated coverage of Affirm with an Outperform rating and a $50 price target when shares were trading at around $37. Affirm closed Wednesday at $44.
“Call us crazy for going into the eye of the storm with a consumer credit play,” Frisch wrote in the note, “but Affirm just has better risk management than the peer group and is well positioned to grow its user base in a fast-growing space with product expansion over time.”
Goldman Sachs analysts warned that higher import duties could compress margins for companies that rely on foreign-made checkout terminals and merchant-side infrastructure, suggesting the impact could be “worse than the 2019 tariffs.”
They also noted that firms like Bill.com, which provide working capital financing to merchants, are particularly exposed to shifts in credit conditions as borrowing costs rise and demand softens. The tariff reprieve offers short-term relief but doesn’t erase longer-term pressure.
Still, Evercore analysts argued in a note on Tuesday that macro weakness might serve as a tailwind for Affirm if traditional lenders tighten access to credit.
“It could even be a net winner if consumers are shut off from traditional credit, and the ~60% selloff to trough multiples takes us back to when credit facilities were not nearly as strong and BNPL was seen as a fad,” wrote Evercore analyst Adam Frisch.
Evercore’s bullishness extends to the Affirm Card — used in both online and in-person settings — as a “Trojan horse” for physical retail growth.
As more users lean on it for everyday purchases, the company gains deeper insight into consumer cash flows, improving its ability to assess risk and tailor offerings. Affirm’s Card GMV more than doubled to $845 million as of December.
Still, the rally remains fragile. The 90-day pause doesn’t eliminate the threat of tariffs — it just delays it. Margin pressure, rate volatility, and geopolitical risk continue to hang over fintechs that have already endured a bruising year.
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