Affirm Shares Soar 19% On BNPL Offering For Amazon Business

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Mack Wilowski
Mack Wilowski
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Mack Wilowski is a staff writer for Investopedia, focusing on breaking news stories, earnings previews, and company-specific insights and analysis. Previously, he was an associate editor for Investopedia's earned media team, where he covered the New York City Recovery Index and Economy Tracker, the weekly "What to Expect" markets preview, The Investopedia Express and Green Investor podcast transcripts, and the Term of the Day newsletter.
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Published November 02, 2023
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Key Takeaways

  • Affirm will offer buy-now, pay-later services to Amazon Business users starting Nov. 24.
  • The partnership will enable thousands of small business users on the Amazon Business platform—mostly sole proprietors—to benefit from expanded payment options.
  • Users can select repayment options ranging from three to 48 months, with interest rates ranging from 10% to 36%.
  • Affirm said customers can rest assured they will "never pay more than the amount agreed to upfront," which could be an attractive proposition at a time of rising borrowing costs.

Shares of payments provider Affirm (AFRM) jumped more than 19% after expanding its partnership with Amazon (AMZN) to offer buy now, pay later (BNPL) services to the e-commerce giant's business-to-business (B2B) clients.

Thousands of small business users on Amazon Business—most of them sole proprietors—stand to benefit from expanded payment options that include paying off their purchases via equal installments over three to 48 months. The new service is expected to become available on Black Friday, Nov. 24.

While most BNPL payment options don't charge interest, customers on Amazon's B2B platform will be charged an annual percentage rate (APR) between 10% and 36% depending on perceived credit risk, Affirm's Chief Revenue Officer Wayne Pommen said in an interview with CNBC.

At a time of rising borrowing costs, this could be a viable alternative to traditional payment options like credit cards—on which interest rates have soared to records recently, reaching a median of 24.12% across all credit cards.

Amazon's partnership with Affirm stretches back more than two years, when the e-commerce giant first introduced the financial firm's BNPL services on its website, offering it to customers who spent $50 or more on a purchase. Earlier this year, Amazon also added Affirm as a BNPL payment option on Amazon Pay.

Affirm shares have more than doubled so far this year, while those of Amazon have risen 60%.

Amazn-Affirm YTD

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  1. Affirm. "Amazon Business Adds Affirm as First Buy Now, Pay Later Provider at Checkout."

  2. CNBC. "Amazon unveils buy now, pay later option from Affirm for small business owners."

  3. Affirm. "Amazon Partners with Affirm to Deliver Pay-Over-Time Option at Checkout."

  4. Affirm. "Amazon Pay Adds Affirm, Providing Customers and Merchants with Another Flexible Payment Option."

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