By Sam Boughedda
Affirm Holdings Inc (NASDAQ:) announced Friday that it is expanding its relationship with Amazon (NASDAQ:) to Canada, introducing a pay-over-time option to customers in the country in both English and French within the next month.
The company said customers who select Affirm as a payment option during checkout on Amazon.ca will go through a free soft credit check that doesn’t impact their credit score, with Affirm then determining the available payment options for that customer. If a customer is approved, they can split their purchases of $50 or more into monthly payments.
Following the news, an analyst at Morgan Stanley, said in a note that the deal is “encouraging.”
“The key takeaway for us from the update is that Affirm is executing well on its Amazon partnership given the retailer’s confidence to move to new geographies, and we’re incrementally confident in Affirm’s ability to drive increased GMV and engagement with existing large partners,” stated the analyst, who has an Overweight rating and $53 price target on Affirm.
He added that the announcement indicates Affirm also has an opportunity to expand with Amazon to new and different loan types and product categories and potentially win better upstream presentment.
“We’ve consistently said that Amazon will be key to driving consumer habituation and awareness of Affirm’s product on other online platforms, and we’re reassured to see the relationship progressing well,” concluded the Morgan Stanley analyst.