Affirm has partnered with Shopify to facilitate Shop Pay Installments in the U.S., the company announced in a press release. In the next few months, Shopify's eligible sellers will be able to offer buy now, pay later options to customers if they choose.
Merchants will receive the full purchase price of the product upfront, and Affirm will collect the funds from customers. With sellers offering the service, customers can divide their payments into four equal bi-weekly, interest-free payments, per the company press release.
The company noted in its announcement that sellers offering a pay-over-time option have experienced a bump in average order value and overall sales.
By providing this service, Affirm aims to connect merchants with new customers seeking alternative payment arrangements, especially millennial and Gen Z shoppers, Max Levchin, founder and CEO of Affirm, mentioned in a statement. The company noted that it served as a marketing accelerator for more than 6,000 businesses and has assisted sellers across various segments, ranging from apparel and consumer electronics to travel, and home and lifestyle.
"With the acceleration of online spending, many small businesses must reinvent themselves. This includes embracing the rising importance of e-commerce strategies and meeting consumers, particularly young shoppers, where they are," Levchin said in a statement.
Affirm and Shopify have both introduced new features for merchants before and during the COVID-19 pandemic. In October, Affirm debuted its mobile app for installment payments. Meanwhile, between mid-March and this month, Shopify has rolled out built-in support for 3D models and video, payment installment and money management features for sellers and a virtual shopping feature.
Shopify's Affirm partnership comes after the company teamed up with Walmart in June to bring more merchants to the retail giant's marketplace. For Shopify, the collaboration with Affirm could potentially help merchants grow their businesses, Kaz Nejatian, vice president and general manager of Shopify's Financial Solutions Team, said in a statement.
"It's critical for businesses to make it easy for their customers to buy from them. Shop Pay Installments helps our merchants offer their customers more payment choice and flexibility, while delivering a seamless checkout experience to boost conversion and overall sales," Nejatian said in a statement.
Affirm is not alone in offering consumers more convenient alternatives to credit cards. Klarna, another installment payments provider which has partnered with various brands and retailers, reached 7.85 million U.S. customers and debuted its no-fee loyalty program last month.