1. About this Document

This Target Market Determination (TMD) describes the class of consumers for whom Affirm’s Low Cost Credit Contract (LCCC) product is designed, having regard to the likely objectives, financial situation and needs of our target market.  It forms part of Affirm’s design and distribution framework for the product. 

This TMD is not a summary of the product’s terms and conditions and does not constitute financial advice. Customers should refer to Affirm’s Terms and Conditions and relevant contractual documents when considering this product.

This TMD is effective from 31 July 2026.

2. Product Description

Product Name: Shop Pay Instalments (SPI)
Product Type: Low Cost Credit Contract (LCCC)  
Credit Limit: Up to $1,999 per user 
Repayment Terms: Four equal fortnightly payments (Pay-in-4), interest-free  
Fee Structure: No fees, including zero late fees 
Distribution Channel: Primarily via Shopify-integrated online merchants
Repayment Method: Debit card repayment only, no credit cards.

Affirm’s SPI Pi4 is a LCCC product that enables customers to purchase products from Shopify merchants on a Buy Now Pay Later (BNPL) basis. The Pay-in-4 (Pi4) product was designed as a safe product for  a wide range of customers, with protections such as credit checks as part of unsuitability assessments in accordance with responsible lending obligations under the National Consumer Credit Protection Act 2009 and the National Credit Code, as applicable. When customers start using SPI, spend limits start low and customers are required to make a first payment at checkout, which is 25% of the purchase value, and each subsequent payment will be of equal value.

To minimise customer harm, Affirm does not charge any fees, nor do we charge interest on the SPI product.  

All loans are required to be paid off in four fortnightly instalments over a period of 6 weeks. Affirm does not allow customers to pay a fee (or interest) to extend the repayment period.

Affirm will not accept credit cards as a repayment method. Customers are thereby protected from paying debt with debt when using SPI.

3. Target Market

Affirm’s SPI product is designed for retail consumers seeking simple short-term and interest-free credit for consumer purchases between $50 and $1,999. Our target customers are comfortable applying for and managing credit digitally, including online self-service credit products and prefer online/electronic contracting and disclosures. 

Our target customers are credit worthy, and seek short-term, interest-free payment options for eligible personal retail purchases from approved Shopify-integrated merchants. The SPI product is intended for consumers who can make the upfront payment and remaining fortnightly debit-card repayments without substantial hardship and who meet Affirm’s identity verification, credit risk and unsuitability assessment criteria.

Eligibility:

Must be at least 18 years old
Australian mobile phone number
Australian resident
Not currently in financial hardship, default of other loans or bankruptcy
Must meet Affirm’s internal credit risk criteria and successfully complete a credit check as part of the unsuitability assessment 

The SPI product is not for customers who:

• prefer or require non-digital (in person or face-to-face) origination channel and customer service

• seek credit for non-personal use purposes (e.g., business, investment, or commercial use)

• are known to have a history of defaulting on similar credit products, or who do not meet Affirm’s credit assessment and identity verification criteria

• seek credit > $1,999 per transaction

• require open-ended credit to use anywhere

• require cash withdrawals or credit-card repayment

• are known to Affirm to be in unresolved financial hardship, bankruptcy, personal insolvency or arrears/default circumstances indicating likely inability to meet repayments

• are seeking credit to address an ongoing inability to meet essential living expenses or other circumstances indicating financial vulnerability or over-commitment.

4. Distribution Conditions and Restrictions

SPI may only be distributed through Affirm-approved Shopify-integrated merchants and through the Affirm-controlled application and checkout journey. Merchants must use only approved product descriptions and checkout messaging, must not vary eligibility criteria, credit limits, repayment terms or disclosures, and must not encourage use by consumers outside the target market. Affirm may suspend or remove a merchant or product category where monitoring, complaints, arrears, hardship, vulnerability indicators or other information suggests distribution may be inconsistent with this TMD.

Distribution Channels: Initial focus on Shopify-integrated merchants who have been onboarded and approved by Affirm and comply with eligibility, onboarding, and compliance checks. Once approved, merchants do not have a significant role in Affirm’s product distribution controls. 

Merchant Restrictions: Affirm will not permit distribution through merchants whose primary business is in prohibited sectors, including but not limited to gambling, firearms, and other categories specified in Schedule 4 of the AFIA Finance Industry Code of Practice

Customer Eligibility: Affirm conducts identity verification in accordance with the Australian Anti-Money Laundering/Counter-Terrorism Financing Act and assess credit and suitability in accordance with responsible lending obligations under the National Credit Code. Only customers who pass these checks will be offered the product.

Disclosure: Key attributes of the product, including the repayment schedule, are communicated clearly to the customer where relevant so they can assess whether the product meets their needs and compare it to other credit products they may be considering.

Marketing materials: the Affirm website and other customer facing disclosures are assessed for appropriateness and compliance and to ensure that, where relevant, they focus on the target market.

Training: Appropriate training, policies and procedures are provided to employees and third party service providers, including to ensure they understand the key attributes of the product, its target market and the distribution conditions and controls.

5. Review Triggers and TMD Review Periods

5.1. Review Triggers

Affirm will review this TMD within 10 business days if an event or circumstance occurs that would reasonably suggest that the TMD is no longer appropriate, or the product is no longer consistent with the likely objectives, financial situation and needs of customers in the target market, or the distribution conditions do not make it likely that the customers  who acquire the product are in the target market. Examples of review triggers may include:

• notification from the Australian Securities and Investments Commission (ASIC) requiring cessation or modification of the product distribution or particular conduct in relation to the product;

• material change to the product or its key attributes or its distribution;

• material change in Affirm’s acceptance criteria for potential customers;

• material change in any other factor or information used to prepare this TMD;

• identification of a material deficiency in the product’s documentation;

• material complaints or a recurring pattern of complaints which may indicate the product is no longer suitable for the described target market or is not being primarily distributed to the target market;

• significant dealings which indicate that the product is no longer suitable for the described target market; or

• material changes in key product and customer suitability metrics such as customer satisfaction, write offs and remediation payments and default rates, or other significant customer feedback.

5.2. Scheduled Review Period

Initial Review: Within 12 months of TMD effective date
Periodic Review: At least every 12 months thereafter, or sooner if a review trigger occurs

6. Monitoring and Reporting Requirements

Distributor Reporting: Affirm’s appointed credit representative(s), and any other regulated person that engages in retail product distribution conduct in relation to SPI must report:

(a) significant dealings that are not consistent with this TMD as soon as practicable and no later than 10 business days after becoming aware;

(b) complaint numbers, complaint themes and complaint details relating to SPI within 10 business days after month-end; and

(c) any other information reasonably requested by Affirm to assess whether this TMD remains appropriate, including information about merchant conduct, customer communications, product display, customer feedback or suspected distribution outside the target market.

Internal Monitoring: Affirm will maintain comprehensive records of complaints, significant dealings, and distribution activities; regular monitoring of key risk indicators (KRIs) such as complaint spikes, arrears, hardship, and vulnerability rates.

Regulatory Reporting: Affirm will notify ASIC of any significant dealing outside the TMD and maintain a register of all TMD versions, review triggers, and review outcomes.

Complaints Handling: Affirm’s Internal Dispute Resolution (IDR) process will comply with ASIC RG 271. Standard complaints will receive an IDR response no later than 30 calendar days after receipt. Credit-related complaints involving default notices, hardship notices or requests to postpone enforcement proceedings will be handled within the applicable 21 calendar day timeframe, subject to the exceptions and additional information processes in RG 271. IDR responses will include the complaint outcome, reasons where required, and the customer’s right to take the matter to AFCA, including AFCA contact details.

7. Rationale for Target Market and Distribution Conditions

This TMD is based on an analysis of the SPI product’s features, intended use, and regulatory requirements. The short-term, interest-free nature of the product makes it suitable for digitally-engaged Australian consumers seeking affordable, transparent credit for everyday purchases. The distribution conditions and restrictions, including merchant onboarding and credit assessments, are designed to minimise the risk of unsuitable distribution and consumer harm, in line with the objectives of the DDO regime and the AFIA Finance Industry Code of Practice.

8. Date of Effect and Review

Effective Date: 31 July 2026
Initial Review: By 31 July 2027, or earlier if a review trigger occurs