Amazon | Affirm: The End Game?

What is Amazon’s winning formula? Besides being the paragon of logistics it has always won on consumer stickiness (Prime) and seamless checkout.

Amazon filed the 1-Click patent in 1997 and it was granted by the USPTO in 1999. Besos’ 1-Click payment shopping made decisioning on your basket almost too easy. One click made any payment paralysis evaporate. Payment info is stored behind one button.

The company mantra is to increase cart and checkout size and reduce friction on both the buy and sell side. Amazon has built, bought and partnered with technology companies to expand the number of consumers and merchants as well as increase their participation and activity.

When Amazon wakes up in the morning, it thinks about ways of driving more basket with its 310 million active customers, 100 million Prime customers, 50 million Echo owners and 5 million sellers worldwide.

Banking and payment services are crucial to Amazon’s growth. So when it comes to 4x payments with BNPL what does its Affirm partnership tell us? – let’s read the tea leaves.

Affirm will allow consumers to split payment above $50 into 4x interest fee payments. Is this a toe in the water for Amazon? Unquestionably BNPL will be the option for 5% of its checkout traffic and based on trends BNPL may grow to 15% over the next few years. If that is the trajectory, is this a try-before-they-buy or a try-before-they-build relationship for the tech giant?

Over nearly two decades, the retailer has invested in 128 companies globally. Amazon has historically acquired startups that adopted the retailer’s technology early on … but Affirm is playing the field with its Shopify partnership at the end of July this year. With a 35% jump in its stock value overnight, Affirm is happy to double date even if it doesn’t end in a wedding ring.

Let me know your thoughts?