Takeaways
- Affirm will offer buy now, pay later services to select Amazon Business users starting today, and these will be available to all individual owners on the Affirm platform. #39;here on Black Friday, November 24.
- The partnership will enable millions of small business owners, particularly sole proprietors, on Amazon's B2B platform to benefit extensive payment options.
- Users can select repayment options ranging from three to 48 months, with interest rates ranging from 10% to 36%.
- Affirm said customers can rest assured that they will “never pay more than the amount agreed in advance”. which could be an attractive proposition in an era of rising borrowing costs.
Shares of payments provider Affirm (AFRM) jumped more than 19% after expanding its partnership with Amazon (AMZN) to offer buy now, pay later (BNPL) services to users of the company's business-to-business (B2B) platform. e-commerce giant. .
Millions of small business users—especially sole traders—on Amazon Business will benefit from expanded payment options that include paying for their purchases in equal installments over three to 48 months. Affirm began rolling out the service to select users today, and all sole owners of the platform should have access by Black Friday, November 24.
While most BNPL payment options do not charge interest, customers on Amazon's B2B platform will be charged an annual percentage rate (APR) of between 10% and 36% depending on the perceived credit risk, Wayne Pommen, Affirm's chief revenue officer, said in an interview with CNBC.
Users interest rate may also depend on the repayment option chosen. Affirm-approved users can choose between three payment options, each with clear payment terms that include the length of the payment plan, interest held, and the total monthly cost and purchase amount.
At a time when Borrowing costs are rising, this could provide a viable alternative to traditional payment options like credit cards, which offer less flexibility and on which interest rates have recently hit record highs, hitting a median of 24.12%. for all credit cards.
Amazon's partnership with Affirm dates back more than two years ago, when the e-commerce giant first introduced the financial company's BNPL services to its website, offering them to customers who spent $50 or more on a purchase. Earlier this year, Amazon also added Affirm as a BNPL payment option on Amazon Pay.
The actions of Affirm's sales have more than doubled so far this year, while Amazon's are up 60%.
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Source: investopedia.com