A Fast-Growing Affirm Looks to Supercharge Its Expansion With an Exclusive Amazon Deal

Buy now, pay later powerhouse Affirm Inc. will be the exclusive provider of BNPL services for Amazon.com until the end of January, 2023, under a deal Affirm announced Wednesday. Affirm will also be included as an option in Amazon’s wallet, Amazon Pay, according to the agreement.

The agreement represents a big step in Affirm’s relationship with the e-ecommerce giant just since late summer, when the BNPL company indicated it was testing a service for Amazon “day and night” after adding the merchant as a client in August. Affirm also provides BNPL services for another major online marketplace, Shopify Inc.

The Amazon test was clearly successful, but Affirm chief executive Max Levchin told equity analysts Wednesday afternoon the inclusion in Amazon Pay is a new, and perhaps equally important, development as e-commerce continues to expand. “Placing in wallets is the next step,” he said. “It’s important for us to be in wallets.”

Executives on the analyst call stressed that, while Affirm will be Amazon.com’s only BNPL provider for the agreement’s term, the reverse is not the case. Affirm is free to serve any client, they said. The agreement initially calls for Affirm to be available for purchases when basket sizes reach $50 or more, executives said.

Amazon aside, Affirm executives indicated fast growth for the company’s fledgling debit card, Affirm Debit Plus. Announced in September, The card is still in beta testing, though the pool of users has expanded dramatically in the past two months to half a million, up from the “several hundred people” executives cited in September. Levchin said the company is high on the new product, which is designed for both in-full purchases and installments, but he refused to predict its ultimate trajectory. “All signs point to it being good. There’s nothing like it out there,” he said.

Thanks in part to its links to marketplaces like Shopify, Affirm reported dramatic growth in a range of key metrics. Gross merchandise volume ballooned 84% year-over-year to $2.7 billion, partly on the strength of a 124% expansion in the ranks of active consumers to 8.7 million. Active merchants shot up in the quarter to 102,000 after finishing the prior quarter at 29,000.

For the quarter, revenue totaled $269 million, up 55% year-over-year but up only modestly from $262 million in the prior quarter.