Investors’ attention was caught on Wednesday when Affirm (AFRM), a ‘buy now, pay later’ company, and Amazon (AMZN) announced their collaboration. Eligible U.S. merchants that offer Amazon Pay can now add Affirm as a payment option. This news resulted in a positive response from investors, as Affirm’s shares rose 8.3% to $17.13. Amazon’s shares, on the other hand, fell by 3.6%. Affirm’s adaptive checkout, can offer monthly or bi-weekly pay-over-time options, this is expected to increase sales and customer loyalty.
Affirm’s President, Libor Michalek, said, “Digital wallets are an integral part of the shopping experience and are expected to account for over half of e-commerce transactions worldwide by 2025. In addition, customers want more choice and flexibility when paying online.” This partnership with Amazon may give Affirm the push it needs, especially after posting a third-quarter loss, albeit narrower than expected.
As of June, 28% of analysts rated AFRM as Buy, 56% as Neutral, and 17% as Sell. J.P. Morgan analyst Reginald Smith rates shares as Neutral and said, “This is a nice win for Affirm, as it further expands the Company’s presence beyond the Amazon marketplace and, in our view, is a tacit endorsement of Affirm and its consumer-friendly policies.”
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