Shopify will start offering Affirm-powered installment plans to customers later this year

Financial technology services company Affirm Power installment plans on Shopify Inc (NYSE: STORE) e-commerce platform, she said on Wednesday.

What happened

Affirm’s “buy now, pay later” financing plan would be available to eligible Shopify merchants later in 2020, he noted.

Customers could divide the total purchase amount into four equal payments, every two weeks, without interest. Affirm claims that it will not charge any additional, hidden or late fees.

San Francisco-based CEO Max Levchin noted the partnership with Shopify would allow the company to continue its mission of “honest and transparent financial products”.

“The era of credit cards is fast approaching, I wouldn’t say it’s the end, but a viable alternative in buy now-pay later tools that are built around transparency, clarity and simplicity is no longer a niche, “Levchin told CNBC.

Why is this important

Testing of the installment service will begin in the coming months, Affirm revealed. The fintech company claimed that its merchants who offer customers a similar time-based payment option saw an increase in average order value and overall sales.

KeyBanc Capital Markets analyst raised price target for Shopify from $ 1,000 to $ 1,125 due to digital momentum for online retailer as physical stores remain closed due to COVID pandemic -19. Shopify rival BigCommerce also filed for an IPO last week.

Price action

Shopify shares traded nearly 0.3% higher at $ 960 in the pre-trade session on Thursday.

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© 2020 Benzinga does not provide investment advice. All rights reserved.

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