Amazon, Affirm Team Up to Offer Buy Now, Pay Later
Since the onset of the global pandemic around March of last year, buy now/pay later (BNPL) financing has rapidly become a popular alternative to credit card borrowing. This trend continued last week when Amazon reached a deal with the fintech Affirm, paving the way for the e-commerce giant to offer BNPL financing for customer purchases.
“Amazon is always looking to add flexible payment options,” said an Amazon spokeswoman, according to the New York Times. “Affirm does just that by offering transparent pay-over-time solutions that customers can choose based on their needs.”
Amazon started testing Affirm’s BNPL service at the end of August, allowing customers to split purchases of $50 or more into smaller installment payments. The company plans to roll out the product more broadly in the next few months, according to American Banker. When the purchase is approved, customers will be able to see the total purchase, but will not be charged any hidden fees.
Though Amazon’s partnership with Affirm is its first BNPL product, it has provided monthly payment plan options for select customers on select products. The company has also offered installment programs for customers with the Amazon Rewards Visa Card, Amazon.com Store Card, and eligible Citi credit card members.
Fintechs like Affirm, Klarna, and PayPal offer BNPL services that allow customers to split purchases into multiple payments⎯typically into three or four months—with the opportunity to avoid revolving debt.