One that got away for Afterpay.
After getting a taste of the buy now pay later idea in an Australian deal with Zip, Amazon is moving deeper into the sector with US group Affirm, in what will be the first ever instalment payments option on the world’s biggest and most visited shopping and ecommerce website.
Affirm’s buy now, pay later checkout option was made available to certain US Amazon customers starting last Friday.
Affirm said Amazon customers would be able to use its service on purchases of $US50 or more — including items like furniture, home goods, electronics and fashion — and pay in monthly instalments. Once approved, customers will be able to see the total purchase price upfront — and they won’t be charged any late or hidden fees, the company said.
The service is being tested with select customers now, Affirm said, and will become more broadly available to shoppers in the coming months.
Purchases, including those from Whole Foods Market, Amazon Fresh and certain digital purchases like movies and books, will not be eligible, according to Affirm.
Affirm already has partnerships with 12,000 merchants, including Walmart (world’s biggest bricks and mortar retailer) and Peloton.
Amazon’s partnership with Affirm is its first with a buy now, pay later provider in the United States; it has worked with Zip in in Australia since late 2019 (ie pre-Covid).
Amazon had already provided monthly payment options on its own for select customers buying certain products. It also offered instalment programs for customers with the Amazon Visa and its Store card and eligible members of Citi card programs.
News of the deal saw Affirm’s jump by more than 35% after-hours Friday on the news.
“By partnering with Amazon we’re bringing the transparency, predictability and affordability that Affirm provides today to the millions of people who shop on Amazon.com in the U.S.,” Eric Morse, Senior Vice President of Sales at Affirm, said in a statement. “Offering Affirm’s alternative to credit cards also delivers more of the payment choice and flexibility consumers on Amazon want.”
Affirm was founded in 2012 by Max Levchin, Max Levchin, Nathan Gettings, Jeffrey Kaditz, and Alex Rampell. Levchin, who co-founded PayPal became CEO of Affirm in 2014.
Affirm floated on Nasdaq in January of this year raising about $US1.2 billion in its IPO. At Friday’s close, it had a market value of $US18 billion. If the 35% rise in the share price sticks today the value will jump to around $US24 billion.
