An Amazon employee sorts the boxes before loading them into trucks to ship to the Amazon.com compliance center in Fernley, Nevada.
Ken James | Bloomberg | Getty Images
Shares of Affirm opened more than 41% on Monday after the now buy and pay platform announced a partnership with Amazon on Friday.
The partnership, which was made available to some Amazon users on Friday, will allow customers to split purchases of $ 50 or more into smaller installments. It also marks Amazon’s first collaboration with a term player, though the company already offers payment options for some items.
Following the announcement, Affirm shares rose as much as 50% on Friday, while Amazon shares remained unchanged. Bank of America analysts called the news “unequivocally positive,” but said it highlights Affirm’s “technological leadership and strong reputation in the BNPL market.” Analysts also maintained a buy rating on Affirm.
Amazon’s entry into the shopping space now, pay later, comes as space demand continues to heat up, especially among the younger generations who turn to BNPL platforms instead of cards traditional lenders who often have high interest rates.
This month, Square announced it would enter the space through a $ 29 billion purchase from Afterpay, and Apple is also planning its own term partnership with Goldman Sachs, according to Bloomberg.
Some of the largest companies in the space are Affirm, Afterpay and Klarna, most of which do not charge interest. Some Amazon customers will be interested in shopping, CNBC previously reported. Affirm’s current partners are Walmart and Peloton.
Amazon’s shares remained largely flat during early morning trading.