Amazon will let you buy stuff now and pay for it later through a new partnership with Affirm
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- Amazon will soon let shoppers delay full payment on items costing more than $50.
- Affirm shares soared more than 40% after it announced its partnership with Amazon.
- E-Commerce companies are moving to consolidate their positions in the "buy now, pay later" space.
- See more stories on Insider's business page.
Amazon is entering the delayed pay arena after announcing its partnership with "buy now, pay later" platform provider Affirm on Friday.
The e-commerce giant's "pay-over-time" option will be available at checkout, allowing Amazon consumers to split the cost of purchases of $50 or more into smaller monthly installments dispersed over a longer period of time.
The total cost of the purchase will be always be displayed, Affirm said, and customers will not have to pay any more than the agreed amount.
Affirm also said that while some of the Amazon customer loans will bear interest, others will come at 0% APR, with no late or hidden fees.
"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.," Senior Vice President of Sales at Affirm Eric Morse said in a statement.
The buy-now-pay-later model has become more popular among younger generations of consumers, who typically desire flexible payment options and are more willing to use this method of credit than to pay the full price upfront. Its market is heating up as e-commerce companies are looking to make deals and capitalize on pay-later companies, like Affirm, Klarna, and Afterpay. PayPal and Apple Pay have also introduced similar installment plans to their payment methods.
Shares of Affirm jumped more than 40% following the announcement of the partnership, which added more than $80 million to its market cap. The Amazon partnership is expected to be a major advantage for Affirm, especially as COVID-19 pandemic-driven e-commerce consumer habits helped Amazon overtake Walmart for most sales.
The payment option is only available to a select few right now, but Amazon plans to release it broadly to all consumers in the coming months.
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