Amazon teams with Affirm to offer buy-now-pay-later option

FILE - In this Oct. 1, 2020 file photo, an Amazon logo appears on an Amazon delivery van in Boston. Amazon wants to help President Joe Biden in trying to get 100 million COVID-19 vaccinations to Americans in his first 100 days in office. The CEO of Amazon’s Worldwide Consumer division, Dave Clark, said in a letter to Biden that the company has a deal with a licensed third-party occupational health care provider to give vaccines on-site at its facilities. (AP Photo/Steven Senne, File)
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Associated Press

SAN FRANCISCO (AP) — Amazon is teaming with payments company Affirm to offer online shoppers a buy-now-pay-later option that does not involve credit cards. San Francisco-based Affirm Holdings Inc. announced Friday that its flexible payment service will soon be available on

The news sent Affirm’s stock up more than 35% in after-hours trading.

With the service, Amazon customers can split the total cost of purchases of $50 or more into monthly payments, and are told the total cost of the transaction up front. Affirm said there are no late fees.

Affirm said the two companies are testing the service with a group of customers and that it will be more broadly available in coming months.

Earlier this month, digital payments company Square Inc. acquired Afterpay, which provides a buy-now-pay-later option for merchants.

Installment plans are popular with retailers because they encourage customers to spend more money. And they enable customers with insufficient funds or credit at the time of purchase to walk out of a store — or check out online — with the item they want.