Affirm, a point of sale credit provider that is currently working with over 2000 merchants, has teamed up with digital commerce marketplace, Shopify, to offer “Buy Now, Pay Later” installment options for merchants.
Approved “Shop Pay” customers will have the option of splitting their total bill, at the time of checkout, into four equal, bi-weekly, payments without having to pay interest or other extra charges. Merchants who take part in the offer will reportedly receive upfront payments (after a service fee has been deducted) and Affirm will take care of collecting payments from the customers.
Max Levchin, founder and CEO at Affirm, stated that merchants who offer their customers a pay-over-time, or installment plans usually see an increase in the number of purchases and people also buy more items when they’re allowed to make smaller payments.
“With the acceleration of online spending, many small businesses must reinvent themselves. By partnering with Shopify, the gold standard of commerce platforms for businesses that want to sell direct-to-consumers, we can help merchants seamlessly enable a pay-over-time option at checkout. In doing so, we’re helping them reach new customers, particularly Gen Z and Millennials, who are looking for more transparent and flexible ways to pay.”
Affirm and Shopify confirmed that they would start testing within the next few months. Shop Pay installment plans will be offered to approved US merchants later on this year.
Buy now, pay later options have become increasingly popular across the globe.
Afterpay, a digital platform that offers interest-free installment plans for online purchases, recently revealed that it will be offering “Buy Now, Pay Later” payments for physical retail stores in the U.S. market to shoppers paying with Google Pay.
United Arab Emirates (UAE) based “Shop Now, Pay Later” Fintech Spotii announced on July 5, 2020 that Daman Investments had invested in its operations. Spotii is a digital payments platform that’s focused on fashion, beauty and lifestyle brands.
PayPal (NASDAQ: PYPL) announced this month that it is expanding its “buy now, pay later” solutions to France, with a new installment product that will enable customers to split purchases into four equal payments over three months, nearly anywhere PayPal is offered.