Amazon is introducing its inaugural purchase now, pay later checkout alternative solely for the vast number of small business proprietors that utilize its digital marketplace, as reported by CNBC.
On Thursday, the technology corporation officially announced the expansion of its collaboration with Affirm to encompass Amazon Business, the business-oriented e-commerce platform.
The shares of Affirm experienced a significant increase of 19% in response to the aforementioned news.
The program will offer loans with a range of $100 to $20,000, and will be accessible to all eligible clients by Black Friday, which falls on November 24th. The focus of this particular company structure pertains exclusively to sole proprietors, which refers to small businesses that are owned and operated by a single individual. This form of business ownership is widely prevalent in the United States.
This development serves as a recent indication of the increasing integration of a financial technology (fintech) characteristic that experienced a significant surge in popularity during the initial stages of the pandemic, coinciding with the heightened valuations of prominent industry participants, namely Affirm and Klarna. When the rapid growth experienced in 2021 came to an abrupt end and values in the industry experienced a significant decline, critics attributed this downturn to the increasing interest rates and the challenges posed by borrower defaults, which were seen as obstacles to the company’s expansion and ability to generate profits.
However, from the perspective of users, this option is often regarded as more transparent compared to credit cards due to the clear disclosure of the exact amount of interest that customers will be obligated to pay in advance. The enduring attraction of the aforementioned product has proven resilient for both consumers and businesses, particularly in light of the growing financial pressures resulting from the gradual depletion of surplus funds derived from pandemic stimulus initiatives.
According to Todd Heimes, the director of Amazon Business Worldwide, there is a recurring sentiment expressed by small businesses regarding their requirement for payment solutions in order to effectively handle their cash flow. Our company provides small business customers with the choice to utilize credit cards or pay by invoice, so offering them the flexibility to make payments over an extended period.
The inception of Amazon Business occurred in 2015, prompted by the recognition that enterprises were utilizing the widely acclaimed retail platform of Amazon for procuring office supplies and making bulk purchases. The division achieved a total sales figure of $35 billion in the current fiscal year, with a global client base exceeding 6 million individuals.