Affirm Holdings, Inc. (NASDAQ: AFRM) saw its stock plummet 5.79% in pre-market trading on Tuesday, following news that the company would lose its position as Walmart's exclusive provider of installment loans. This development marks a significant setback for the Buy Now, Pay Later (BNPL) firm, which has held this exclusive partnership since 2019.

The decline comes as Swedish BNPL company Klarna Group announced a new partnership with OnePay to become the exclusive provider of installment loans for Walmart purchases in the United States. Klarna stated that the transition would be gradual, with OnePay beginning to integrate Klarna's installment loan options into Walmart's checkout across all channels in the coming weeks.

In response to the news, Affirm released a statement indicating that it would continue to focus on its long-term strategy of competing based on its products and entering into sustainable partnerships. However, the loss of such a major exclusive partnership is likely to have a significant impact on Affirm's business, as reflected in the sharp drop in its stock price. Investors will be closely watching how Affirm navigates this challenge and whether it can maintain its market position in the competitive BNPL sector.