Amazon Taps Installment Financing To Affirm

Diving letter:

  • Online retail giant Amazon has agreed to work with Affirm to enable some of its online customers to pay for goods in installments. Affirm said in a press release on Friday. They are currently testing the new service with a subset of Amazon customers, but they expect to make it more widely available to the retailer’s customers in the coming months.
  • Only “selected” Amazon customers who make a total purchase of at least 50 US dollars are entitled to use the affirm service “Pay over Time”, which enables consumers to make monthly payments on their total tab after you have agreed to the financing conditions at the cash register. An Affirm spokesman declined to comment on these terms, but the company’s website states that simple interest, not compound interest, will be charged with no “fees of any kind”.
  • In a statement, Amazon confirmed the new connection, saying, “Amazon is always keen to add flexible payment options and Affirm does just that by offering transparent pay-over-time solutions that customers can choose from as needed and without delay or hidden fees. “

Dive Insight:

The new connection comes as Amazon is exploring alternatives to the traditional credit card payment system, including a recent announcement that it has a Surcharge on Visa credit card Shopping in Singapore from next month for visas “high payment costs. ”

Seattle-based Amazon suggested using the surcharge for payments. to increase Visa, the largest US card network company.

Amazon works with San Francisco-based Affirm, while other companies partner with companies that buy now and pay later.

Digital payments company Square agreed earlier this month to acquire Melbourne, Australia-based buy-now-pay-later company AfterPay for $ 29 billion. Square that was trying to set up their own banking services, agreed to buy AfterPay with a premium of around 30%, underlines the growing worldwide popularity of BNPL Services for consumers looking for new forms of credit.

This consumption trend is interlinked with increasing ones US Congress interest, and the responsiveness of the private sector by making more financial services, such as lending, available at a lower cost to people who may not have bank accounts or access to credit cards.

“By partnering with Amazon, we’re bringing the visibility, predictability, and affordability that Affirm offers today to the millions of people who shop on Amazon.com in the United States,” said Eric Morse, Affirm’s senior vice president of sales Web post. “Affirms’ alternative to credit cards offering also offers more payment options and flexibility that consumers want from Amazon.”

Affirm’s credit options are available for purchases at Walmart, Peloton, Ring, Pottery Barn, Adidas, and Neiman Marcus, as well as other retailers and distributors, according to Affirm’s website.

An Affirm spokesman declined to comment on the specific loan terms that will be available to Amazon customers. When providing personal loans to consumers, Affirm has offered in the past various credit periods, including periods from one to 60 months, according to a recent confirmation of quarterly regulation Submission.

For the nine months ended March 31, Affirm reported net sales of $ 608.7 million, including revenue from its merchant and virtual card networks and interest income and profits from the sale of its loans, the filing said.

Just as the number of fintech companies like Affirm are increasingly making credit alternatives available, according to a. consumer satisfaction with traditional card companies current JD Power survey.

Affirm share made the news its new partnership with Amazon, the largest US e-commerce company.

Affirm and Amazon spokespersons declined to specify when the Affirm credit options might become more widely available to Amazon customers.

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