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08/30/2021

Amazon adding Affirm to flex payment options

Dan Berthiaume
Senior Editor, Technology
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Amazon and Affirm
Amazon is accepting "buy now pay later" payments via Affirm.

An e-commerce titan is increasing its presence in the burgeoning “buy now pay later” (BNPL) payment space.

Amazon is partnering with financial products and services company Affirm to enable qualified customers to pay for their purchases over time, with monthly payments and no interest or late fees. Amazon is currently testing the Affirm BNPL solution at checkout with select customers. In the coming months, Amazon plans to make Affirm more broadly available to its customers.

As a result of Amazon and Affirm's partnership, select Amazon customers now have the option to split the total cost of purchases of $50 or more into monthly installment payments by using Affirm. Approved customers are shown the total cost of their purchase upfront and will never pay more than what they agree to at checkout. Consumers utilizing the Affirm BNPL service at Amazon will not be charged any late or hidden fees.

This agreement marks a major step forward in Amazon’s acceptance of flexible BNPL payments. In June 2021, the e-tailer began offering the Afterpay flexible payment option via the Afterpay mobile app to pay in four interest-free installments.  Meanwhile, Affirm’s interest-free, flexible installment payments are also accepted by retailers including David’s Bridal and Neiman Marcus.

According to recent data from eMarketer, Affirm holds a 13% share of the rapidly growing BNPL marketplace. The data also indicates that 45.1 million U.S consumers ages 14 and older will use a BNPL platform during 2021, up 81.2% from the previous year. This represents more than one-fifth (21.5%) of digital buyers in the U.S. By 2025, that figure will grow to more than one-third of U.S. digital buyers.

Younger consumers are driving adoption of flexible payments, eMarketer said. Millennials account for 42.7% of BNPL payment volume, followed by Gen Z shoppers, who account for 30.3%.

Amazon has always focused on being at the forefront of e-commerce trends, and a June 2021 study from Juniper Research also indicates BNPL is poised for rapid near-term growth. The study shows that spending via BNPL services which are integrated within e-commerce checkout options, including fixed installment plans and flexible credit accounts, will reach $995 billion in 2026, up 274% from $266 billion in 2021. 

Juniper Research analysis also indicates that BNPL growth will be fueled by a greater consumer appetite for credit to spread costs, particularly in the wake of the COVID-19 pandemic. As a result, by 2026, BNPL services are expected to account for over 24% of global e-commerce transactions for physical goods by value, up from 9% in 2021.

In yet another sign of BNPL’s growth potential, financial payments company Square, whose popular Cash App payment platform counts more than 70 million customers, is acquiring Affirm rival Afterpay in an all-stock deal that values Afterpay at about $29 billion.

“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.,” said Eric Morse, senior VP of sales at Affirm. “Offering Affirm’s alternative to credit cards also delivers more of the payment choice and flexibility consumers on Amazon want.”