![]() They also support business-to-business lenders and support the 3 rd party PSP. ![]() It was started back in 2007, Amazon Pay focuses on Amazon’s consumer base allowing them to pay with their Amazon accounts on external merchant websites. This is one of many salient businesses run by Amazon.Īmazon Pay is their online payments processing service. It is important to briefly discuss the history of Amazon Pay. It’s a flywheel with tremendous network effects as seen below. It’s a flywheel effect where more merchants allow for more customers which leads to higher transaction frequency for data, smaller merchants want to join, and more revenue and GMV for Affirm. The more a BNPL provider is able to meet and achieve most of the metrics above, the higher the likelihood to achieve more customers and merchants. The more merchants a BNPL provider reaches, the better the appeal to another merchant.Ĥ.) The History, experience, and knowledge with Underwriting/Credit for consumers.ĥ.) The Brand and Trust element - do consumers know and trust the Brand, especially at the checkout.Ħ.) The access to capital and funding structure since it's a high-velocity business. These are the prime metrics that every merchant looks for before selecting a BNPL Provider.Ģ.) Secondly is a frictionless POS payment solution and the checkout experience for the consumer.ģ.) The existing merchant’s network and reach. Key Determinants/KPIs:ġ.) The ability of the provider to increase Average Order Value (AoV), Sales conversion, reduce cart abandon rate at checkout & increase Average Cart Order, Upsells, and increase repeat consumers for merchants. I begin this article by discussing the 6 key performance indicators that determine success within the Buy Now Pay Later Industry, especially for the dominant players. This context is important for understanding how the industry works and how a moat or competitive advantage emanates for a fintech player. It is important to begin with some context on BNPL. I wrote an article the weekend after Square ( SQ) released its financial results and announced the acquisition of Afterpay. The sudden interest amongst the leading Fintech players who want to enter into the BNPL space begets the question that there is external evidence pointing towards the rise of this BNPL industry. The Buy-Now-Pay-Later (BNPL) was one of the major beneficiaries from Covid. We’ll finalize by discussing the risks and catalysts for future growth. The second aspect will discuss the competitive advantage that Affirm has within the BNPL space over its competitors. This article will discuss some of the hypotheses from existing information available to understand why Amazon chose to work with Affirm. We also know that Shopify ( SHOP) expanded Affirm's BNPL solution amongst all their US Merchants.Īmazon is known for generally managing costs and they typically build solutions in-house. and Affirm Holdings Inc.’s PayBright were planning to launch a “buy now, pay later” program for Apple ( AAPL) device purchases in Canada, stepping up the iPhone maker’s ambitions to offer more financial services according to the release. According to the release on Affirm's website, "Select Amazon customers now have the option to split the total cost of purchases of $50 or more into simple monthly payments by using Affirm."Įarlier into August, News broke from Bloomberg that Apple Inc. Last week, Affirm ( NASDAQ: AFRM) announced it was partnering with Amazon to Deliver Pay-Over-Time Option at Checkout for Amazon ( AMZN) customers.
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