The news: Amazon will let shoppers in Canada pay using buy now, pay later (BNPL) provider Affirm on both its English- and French-language sites within the next month, per a press release—building on the brands’ August 2021 US partnership. Shoppers can apply and, if approved, finance purchases over $50 in monthly installments.
Why it matters: BNPL is on a tear in the Canadian market.
Amazon’s opportunity: Bringing BNPL into the fold could ensure that Amazon doesn’t lose sales as the payment method gets more popular in Canada.
By accepting BNPL—rather than avoiding third-party tie-ups, as it’s historically done—Amazon is ensuring that customers who want to use BNPL don’t leave for a rival retailer like Walmart, which developed a BNPL solution for its co-brand users in Canada. This can help Amazon avoid attrition, build long-term loyalty, and generate sales.
Affirm’s opportunity: Partnering with Amazon can help Affirm maintain a strong market positioning in Canada.
Canadian ecommerce is set to jump 15%, reaching CA $87.16 billion ($64.98 billion) this year, and it will expand its reach to 17.2% of total retail by 2026, per our forecasts. Partnering with the market’s largest etailer could help Affirm accelerate its growth and crowd out the competition in a burgeoning sector, giving it a lasting advantage in the market.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.