The partnership, which was made available to some Amazon users Friday, will allow customers to break up purchases of $50 or more into smaller installments. It also marks Amazon’s first partnership with an installment player, though the company already offers installment options on some items.
The deal was announced Friday, sending Affirm shares up as much as 50% in after-hours trading. Analysts at Bank of America called the news an “unambiguous positive,” but said it highlights Affirm’s “technological leadership and strong reputation in the BNPL market.” The analysts also maintained a buy rating on Affirm.
Amazon’s entry into the buy now, pay later space comes as demand for the space continues to heat up, particularly among younger generations who are turning to BNPL platforms instead of traditional credit cards that often come with high-interest rates.