Amazon Rolls Out New Payment MethodBy Cinthya Alaniz Salazar | Tue, 08/31/2021 - 10:30
Amazon partnered with payment network Affirm to test the flexible the Buy Now, Pay Later (BNPL) modality with select consumers on its platform. If found viable, it is projected to be made more broadly available across the platform according to a press release by Affirm on Friday.
Testing, which is set to begin in the coming months, will allow Amazon consumers to split the total cost of purchases of US$50 or more into monthly payments without the need for a credit card. Additionally, customers will never be required to pay more than they agree at checkout when they are shown the total cost of their purchase. In other words, no hidden fees. Furthermore, customers will be able to build a credit history where they will be able to access terms of three and 48 months with interests ranging from zero to 30 percent.
“By partnering with Amazon we are bringing the transparency, predictability and affordability that Affirm provides today to the millions of people who shop on Amazon.com in the US,” said Eric Morse, Senior Vice President of Sales at Affirm. “Offering Affirm’s alternative to credit cards also delivers more of the payment choice and flexibility consumers on Amazon want.”
As indicated by Morse, testing is projected to start in the US where both companies are headquartered, but he did not indicate a specific date, nor their plans for subsequent expansions. However, considering that similar BNPL services have already arrived in Mexico in recent years, they country could be a logical choice for expansion.
In hindsight, Amazon is actually late to the BNPL movement given that Affirm had already managed to secure a partnership with one of its biggest competitors, Walmart, since 2019. This recent move may have come in recognition that Amazon sales will slow down after the pandemic subsides, with this new payment option the world’s largest e-commerce store hopes to keep some of the momentum it had garnered during the COVID-19 pandemic. Overall, given the growing popularity of BNPL payment systems, it is likely Amazon has found a way to maintain, if not boost, transactions rates beyond the pandemic.