What is Affirm payment and how does it work with Amazon’s buy now pay later scheme of payment? Affirm is a loan service provider that will allow users to purchase goods or services that are offered by the many virtual vendors and allow them to pay off the cost of the goods and services as fixed monthly payments.
One of the biggest benefits of using Affirm service is that as a customer you do not have to shell out any extra costs as service fees, prepayment fees, hidden fees, or late fees. This is a trait that appeals to clients the most.
And Amazon news says that it has partnered with Affirm to offer the same facility to its innumerable customers that can buy goods or services now and pay later space.
Amazon enters buy now pay later space
Let us find out more about the same in the paragraphs that follow.
BNPL or buy now pay later is a popular choice among the young and not so young crowd especially for the ones that do not use plastic cards, don’t qualify for one, or if you do not prefer that mode of payment.
It is a trend that has set in that more and more entrepreneurs and virtual companies are entering into a partnership with buy now pay later service providers so that they can extend the facility to their customers.
So, Amazon (NASDAQ: AMZN) has partnered with Affirm (NASDAQ: AFRM) that allows customers of Amazon to split shopping amounts of $50 and more into smaller Amazon monthly payments or installments. It will not only be convenient for the customers but during the pandemic when people are facing job loss and pay cuts, this method of payment becomes a convenient way to shop.
Amazon’s buy now pays later scheme might also attract new customers to the already existing family of innumerable customers.
Buy now pay later option will not use the traditional method of checking the credibility instead Affirm has its proprietary mode of judging and checking creditworthiness. Their approach is that they will offer the service to customers first with smaller amounts and if they find that they are responsible for the payments, the credit limit is raised.
Amazon receives the entire value of the items from Affirm. In some instances, Affirm will charge interest from customers although this interest may be quite low as compared to what you would have to pay if you made the payments for paying with credit from other vendors.
It is also being anticipated that in the next couple of years, Amazon will be able to rope in many customers because of the Affirm partnership since the facility that Amazon is extending will make purchases much hassle-free and will not burn a hole in the pockets of clients.
Affirm has already entered a partnership with many online merchants in the past and serves as many as 12,000 retailers and this number is increasing with every passing year, Walmart being one of its prominent clients.
It also works with Shopify and other well-known brands in the retail sector. The concept of buy now pay later has grown in popularity and this is one reason why Square spent $29 billion to acquire Afterpay, which is an Australian BNPL firm.
If reports are to be true, even Apple is contemplating to partner with Goldman Sachs for extending its buy now pay later services and facilities.