Amazon has officially launched a ‘buy now, pay later’ (BNPL) service allowing customers to pay for goods over $50 dollars in a number of monthly installments.
Amazon announced on Friday that it has teamed up with US BNPL provider Affirm to launch the service to a select number of its American shoppers.
It is understood that the service, which allows customers to select a ‘pay later’ option at the checkout on Amazon, will be expanded to more customers across the country in the coming months.
Affirm, which also works with Amazon’s largest US rival Walmart and fitness giant Peloton, has seen its shares skyrocket nearly 50 per cent on news of the tie-up, adding around $8 billion to its market capitalisation.
Unlike other leading BNPL providers such as Klarna, Affirm said that some customers will be required to pay interest on their loans, but many will still offer zero per cent APR.
“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.,” Affirm’s senior vice president of sales Eric Morse said.
“Offering Affirm’s alternative to credit cards also delivers more of the payment choice and flexibility consumers on Amazon want.”
Amazon has been experimenting with its own BNPL service, dubbed “Amazon Pay Later”, in India amassing over 2 million users since launching in April 2020.
The service allows customers to make purchases on credit of up to RS 20,000 (£194) and pay off their purchase in up to 12 interest free instalments.
Unlike many of its major BNPL rivals, Amazon Pay Later also allows customers to pay things like utility bills on credit.