Amazon cooperates with Affirm on buy now-pay-later payment option


The buy now and pay late market is booming. More and more people are taking advantage of the possibility of paying for a product in installments. Online retail giant Amazon also wants to take advantage of this trend and has partnered up with the Affirm payment app for this purpose.

• The BNPL market is growing in popularity
• Affirm brings more “transparency, predictability and affordability” to Amazon
• Shares react positively to the transaction

Buy a product now, but only pay it back later in installments – this is a growing trend, especially among younger people. This new flexibility in purchasing is made possible by a wide variety of so-called “buy now-pay-later” (BNPL) platforms which specialize in precisely this service. They are often an inexpensive alternative to the traditional credit card, since in most cases there is no interest for the customer, only the purchase price is actually paid. There are now many vendors competing for every customer in the highly competitive market such as Klarna, Afterpay or Affirm.

Partnership between Affirm and Amazon

Fintech Affirm recently pulled off a coup – a partnership with online giant Amazon. As the two companies recently reported, the option to pay with Affirm would now be available in a testing phase for selected customers in the United States for purchases starting at a value of US $ 50. There would be no hidden costs for customers and no interest would accrue, just as it fits the Affirms business model.
“By partnering with Amazon, we bring the transparency, predictability and affordability that Affirm offers to the millions of people who shop on Amazon.com in the United States today. Affirm’s alternative to credit cards provides more choice and flexibility in what consumers want on Amazon, ”said Eric Morse, senior vice president of sales, in the press release.

Here’s how Affirm and Amazon stocks reacted

The news was very well received by investors: Affirm shares jumped 46.67% to $ 99.59 on the day of the report. For the Amazon newspaper, it rose 2.15% to 3,421.57 US dollars.

Buy-now and late-pay options are growing in popularity

The “Rethinking Consumer Financing” study, published in August by financial services provider Credi2, also shows that BNPL options are growing in popularity. A representative survey of 1000 people from Germany and Austria on the topic of buy-now and pay-later models was carried out. According to Credi2, the results clearly show that a payment option in installments is becoming increasingly important for customers, especially in the 18-34 age group. Increasingly, store donations rely on payment apps like Klarna and PayPal & Co., which could prove to be a problem for banks: getting paid. For the customer, it becomes obvious that the loan process is going well is integrated into the purchasing process, ”said Credi2 CEO Daniel Strieder, commenting on the study.

Tech giants jump on the bandwagon

Amazon isn’t the only tech giant to team up with a BNPL service provider. Square recently announced that it would take over rival Afterpay for $ 29 billion. According to Bloomberg News, the Apple iCompany is considering installing a similar payment option with the big US bank Goldman Sachs.


About Matthew R. Dailey

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