Last Updated: January 18, 2022
Affirm Holdings, a buy now, pay later platform, saw its stocks soar up immensely after announcing a partnership with Amazon, MarketWatch informs.
Last Friday, August 27, Affirm officially announced its first partnership with the e-commerce giant Amazon with enormous plans for even further collaboration in the months to come. This Monday, Affirm’s stocks skyrocketed, rising as much as 50% in after-hours trading. What the partnership offers is to allow Amazon customers to pay in installments without hidden or additional fees. Amazon customers will now have the option of splitting $50 or more into monthly payments with Affirm.
This summer, Affirm experienced some drawbacks. Its shares went down the moment Apple announced that it will be joining the BNPL business but increased in August when Apple was said to be working with Affirm for the Canadian Market. The BNPL trend has been gaining popularity in the US, so Amazon’s decision to join forces with Affirm is not surprising and the timing “could not have been better” according to RBC’s analyst Daniel Perlin. He continues: “The combination of Shopify and Amazon as platform partners for Affirm, we believe, has quickly changed the conversation with investors, with the bear argument on AFRM being a financial services firm, and valued accordingly, quickly being overtaken by the sheer growth opportunity that these two partnerships afford.”
The buy now, pay later system seems like an excellent alternative for those shopping online. That’s why it gained even greater popularity during the coronavirus pandemic. During the lockdown, people increasingly shopped online, and the BNPL system was a welcome choice. It’s especially popular with the younger generations because of the accessible and simple way of payment. Square (read the full Square review here) was one of the first to understand the benefits of the BNPL system and its applications in the future. That’s why the company acquired Afterpay this month with the goal of growing its customer base.
Partnering with Amazon, Affirm is proof to the fact that the company is gaining the momentum which was promised to investors when it made its debut in January this year. Amazon strongly believes that this will turn into a great partnership because together with Afterpay Inc., it’ll offer predictability and affordability to millions of users across the US.