New alternative credit card company Affirm has partnered with e-commerce giant Shopify to push a new way for consumers to divide purchases without interest or fees.
“Shop Pay Terms” – A new option that Canada-based Shopify will launch later this year, will provide approved Shop Pay customers with this option at checkout, with their total purchase divided into four equal, biweekly payments , which will be processed and managed by Affirm.
Affirm, which was ranked 23rd on the 2020 CNBC Disruptor 50 list, said the new payment and partnership option reflects how small businesses must reinvent themselves with e-commerce strategies and meet young shoppers where they prefer to shop. Shopify is one of the fastest growing trading platforms for companies that want to sell directly to consumers and has witnessed a dramatic rise in stock value this year.
“We can help merchants seamlessly enable a payment option at checkout. By doing so, we are helping them reach new customers, particularly Generation Z and Millennials, who are looking for more transparent and flexible payment methods. “Founder and CEO Max Levchin said in a press release.
Levchin, who is also one of the original founders of PayPal, echoed these comments Wednesday in an interview on CNBC’s “Closing Bell”, adding that the fintech company has already seen “incredible traction on Shopify” in terms of adoption by users.
Affirm’s existing “buy now, pay later” alternative to credit cards is available at more than 6,000 merchants in the US and is used by 5.6 million people, according to the company. As a result of the Covid-19 pandemic, there has been a massive increase in digital adoption in recent months.
“I think the switch from offline spending to online spending is very powerful. I think it’s here to stay,” Levchin said, noting that the demographics of Affirm users have changed with the adoption that now includes older customers like her 72-year-old son. mother. “I think it will eventually slow down a bit … but I don’t think the trend is going to reverse.”
Levchin said the biggest winners in changing shopping habits will be digital platforms, not necessarily the merchants themselves. “When you look at retailers that write big … platforms, providers that allow merchants to serve customers where they are, who are online, will be big winners,” he said. “On the consumer side … I think the credit card era is coming fast, I wouldn’t call it an end, but a viable alternative to buy-now-pay-after tools that are based on transparency, clarity and simplicity. “
Affirm and Shopify will begin testing in the coming months, with the hope that “Shop Pay quotas” will be available to eligible US merchants later this year. The terms for consumer approval to access the new option “Buy payment” were not detailed.
Affirm is a twice CNBC Disruptor 50 company.
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