Amazon customers will soon have another payment option at checkout.

Affirm, a so-called buy now, pay later payment provider that allows customers to pay for their purchases in instalments, said on Friday it had reached a deal with the online retail giant.

Affirm said Amazon customers would be able to use its service on purchases of $US50 or more — including items like furniture, home goods, electronics and fashion — and pay in monthly instalments. Once approved, customers will be able to see the total purchase price upfront — and they won’t be charged any late or hidden fees, the company said.

The service is being tested with select customers now, Affirm said, and will become more broadly available to shoppers in the coming months. Certain purchases, including those from Whole Foods Market, Amazon Fresh, and certain digital purchases like movies and books, will not be eligible, according to Affirm.

“Amazon is always looking to add flexible payment options,” an Amazon spokeswoman said, “and Affirm does just that by offering transparent pay-over-time solutions that customers can choose based on their needs.”

Loading

Buy now, pay later services have become an increasingly popular option among consumers. And the partnership follows another giant deal last month: Square, the payments firm run by Twitter chief executive Jack Dorsey, agreed to acquire Afterpay for $US29 billion ($39 billion). That deal will open the instalment option to millions of small business that process their credit card transactions through Square’s app.

Affirm — whose shares rocketed more than 30 per cent in after-hours trading — has already become partners with 12,000 merchants, including Walmart and Peloton. Peloton accounted for 30 per cent of the company’s total revenues in the first fiscal quarter of 2021, according to an August research report from FT Partners, an investment banking firm focused on financial technology. That was up from 14 per cent in the same quarter a year earlier.

Amazon’s partnership with Affirm is its first with a buy now, pay later provider in the United States; it works with Zip in Australia, where these options are already more established. Amazon had already provided monthly payment plan options on its own for select customers buying certain products. It also offered instalment programs for customers with the Amazon.com Store Card, the Amazon Rewards Visa Card, and eligible Citi credit card members.