Amazon ties up with Affirm for Buy Now Pay Later Option

Karthik Subramanian

Amazon has marked its entry into the buy-now-pay-later space with the partnership with BNPL firm Affirm which should help the users to split up their purchases into 3 or 4 monthly installments.

The BNPL space is indeed heating up and there has been tremendous interest from investors, users, and businesses to get into this field. The field is quickly getting crowded and with the entry of even very big companies like Amazon, Paypal, Klarna, and Apple into this space, the competition is only going to get more difficult in the months to come. Square has also announced its intentions of entry into this field and this has basically made sure that new entrants and startups in this space are going to struggle shortly but it also means good offers for the users.

“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.,” Eric Morse, Senior Vice President of Sales at Affirm, said in a statement. “Offering Affirm’s alternative to credit cards also delivers more of the payment choice and flexibility consumers on Amazon want.”

Affirm has been around for many years with its BNPL product and it currently works with more than 12,000 merchants and it has been able to ride this wave through shrewd investments, funding, and partnerships like those with Amazon now. This partnership would initially be served only for select merchants and users who would be given the Affirm BNPL product as one of the payment options for purchases that are worth more than $50. Though installment options for purchases have been around for a very long, they were mainly used for large purchases like houses and furniture and it is only in the last year or so that online e-commerce companies have woken up to the possibilities of using BNPL products.

These products are welcome by the users and the pandemic period has made these products even more welcome for users who want to split their risks across several months and thus reduce their purchasing burden. It has also made the users more supportive of digital payments which have led to this BNPL boom over the last year or so. On the other hand, BNPL companies would have to contend with credit defaults which would lead to other headaches like credit handling, credit verification, etc which could complicate the process but like the card industry, which has been reaping rewards by following a similar business model, the BNPL companies would also be looking to do the same.

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