Amazon is the one-stop-shop for all purchases you could ever want. They sell everything from books and clothing to food and electronics. It's an online store where you pay upfront for your goods before they get delivered to your home, either the next day thanks to their Prime delivery service, or a few days later.
Now, Amazon will be offering their products with the possibility for customers to buy now and pay later thanks to their deal with Affirm. This is a great option for customers who want to be able to purchase an item and pay the money off in the future.
Let’s take a closer look at the Amazon and Affirm deal and what it means for the ecommerce sector.
Let’s take a brief look at both companies
There’s probably no need to introduce them but allow us to take a moment for a quick reminder.
Amazon is a multinational company that ships pretty much any type of goods to any country. It is an eCommerce store as much as it is a digital streaming service. And as it started off as a one-stop-shop for products, it has considerably evolved over the past few years. Now, customers can not only purchase infinite types of items, but they can also sign up to enjoy their music, books, and entertainment streaming service.
Affirm on the other side is a financial company based in San Francisco, who have a heavy focus on consumerism. They seek to bring modern technology into the eCommerce industry to help people pay off their purchases without late fees and credit cards.
The Current eCommerce Sector Landscape
The landscape of the eCommerce sector has dramatically shifted in the last 18 months. Since the pandemic hit, many eCommerce businesses have struggled, and some others have thrived. As stores were forced to close, people’s buying behavior changed, eventually leading to an increase in online shopping.
With some businesses not having an online shop, it has impacted them significantly.
Customer demands have thus shifted, and many of their needs are now tied to online shopping. Among these needs, customers not only expect easy access to goods via fast delivery, but many of them are also looking to scrap credit cards. They’re looking for alternatives allowing them to pay later, without having to face high-interest rates.
Thus, to respond to this rising trend, brands are now adapting their traditional payment options to satisfy the demands of their customers and avoid losing business. That’s where companies like Affirm come into play! They offer customers a buy-now-pay-later option so that they can enjoy the product for some time before handing their money over, without interest (if paid before a certain deadline).
This new shift in payment methods is bound to have a considerable impact on online transactions and represents a key milestone that ecommerce experts can’t afford to miss! And as one of the key players of the sector, Amazon seems to be well aware of that. As a matter of fact, the giant eCommerce conglomerate has recently announced a deal with Affirm, which will probably mark a turning point in the industry.
What You Need To Know About The Deal
The Amazon and Affirm deal was highly anticipated by customers. The giant eCommerce platform will now be able to provide customers with a flexible payment option, which it never has before.
The deal has already been confirmed and trials are currently underway. There is no final date as to when it will be available to all customers, but it is due to roll out to all Amazon users in the coming months. It will guarantee to be a huge success and hit, so the sooner the better for both the customers and the businesses.
What does this new partnership actually include? It will be possible for customers to shop for items such as furniture, housewares, electronics, and fashion, for a minimum spend of $50.
As some BNPL schemes charge extra for using the service, both companies have their customers in mind and want to ensure that they are not misled. Affirm has confirmed that they will ensure that no late fees or hidden charges are added, so that customers can pay back exactly what they spent on the product.
One of the main (if not only) downside to the Amazon and Affirm deal is that not every product is available for BNPL. For instance, Amazon’s Whole Foods Market, Fresh food service, and digital purchases will not be eligible for late payment options.
What Does This Mean For The Future Of eCommerce?
Amazon signing up for this Affirm deal will open up opportunities for multiple eCommerce businesses. The company does not only sell their products, but they are also a host for a multitude of businesses across the globe, hosting all kinds of brands from homeware to clothing, which will also be shoppable through this new payment service.
The buy-now-pay-later payment option being in high demand since the pandemic, it was an obvious option for Amazon. They have always wanted to offer flexible payment options to satisfy their customers and ultimately also boost sales.
Affirm has already partnered with other large businesses such as Peloton and Walmart, so it was only right for Amazon to follow suit.
Although the minimum spend is $50, the buy-now-pay-later option will satisfy most purchases made on their website and will likely make customers spend more than they planned to so that they can utilise it.
Amazon is a company that is constantly innovating and improving to satisfy its customers, and it certainly pays off as they’re one of the largest and most profitable firms on the planet.
The buy-now-pay-later deal with Affirm is a huge step for the international conglomerate, paving the way towards new ways of purchasing.