Shares of Affirm Holdings soared 45% during Monday's trading session after the fintech platform announced a new partnership with Amazon on a buy now, pay later option. The partnership will give select Amazon customers the option to split the total cost of purchases valued at $50 or more into monthly payments using Affirm.
The buy now, pay later option can be used for Amazon products ranging from furniture and home goods to electronics, fashion and more. However, orders from Amazon Fresh and Whole Foods Market, digital purchases such as movies or Kindle books, gift cards, or products that violate Affirm’s Terms of Service are not eligible.
Before making a purchase, Amazon customers will be shown their Affirm payment schedule – which ranges from three to 48 months – their cost per month and any interest. According to Affirm, interest on the Amazon customer loans will range between 0% to 30% APR. Customers can set up automatic payments or make a payment through Affirm.com or the Affirm app.
"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.," Affirm's senior vice president of sales Eric Morse said in a statement. "Offering Affirm’s alternative to credit cards also delivers more of the payment choice and flexibility consumers on Amazon want."
In the coming months, the e-commerce giant plans to make Affirm more broadly available to its customers.
Amazon is the latest company looking to offer its customers a buy now, pay later option through Affirm. The company has forged partnerships with over 12,000 merchants, including VRBO, Nordstrom, Poshmark, Dyson, Williams Sonoma brands, Peloton and Casper.
Meanwhile, Square announced it would acquire the Australian payment startup Afterpay for an all-stock deal valued at around $29 billion. The deal would allow Square to offer buy now, pay later options in its Seller and Cash apps.
Apple is also reportedly considering a buy now, pay later option in partnership with Goldman Sachs that would allow Apple Pay users to split their payments into four interest-free installments, or across several months with interest.