Amazon and Walmart Square Off Over Buy Now, Pay Later

Walmart app

This week, Walmart Canada introduced a new offering, allowing its customers to opt for an interest-free buy now, pay later (BNPL) payment method, which is powered by Klarna. Shoppers visiting and using the Walmart Canada and Klarna mobile apps can now enjoy increased payment options and enhanced flexibility.

“Introducing Buy Now, Pay Later for shopping through and our Walmart Canada app is the latest way we’re providing more payment choice and flexibility for customers,” Laurent Duray, chief eCommerce officer, Walmart Canada, wrote in a blog post. “Our focus has always been to help Canadians save money and live better and as we head into the holiday season, we’re prioritizing the customer experience by providing even more options when Canadians choose to shop with us.”

Walmart stated that the launch of the solution came as demand for BNPL has been growing rapidly among Canadian consumers, as preferences shifted toward flexible, better-value payment options. BNPL payments in Canada reportedly grew by 51.6% annually and are expected to achieve US $2.13 billion by the end of 2023.

Klarna’s BNPL service enables Walmart Canada’s customers to split their purchases into four flexible, interest-free payments spread over six weeks.

Amazon’s B2B Offering

But as Walmart teams up with Klarna, Amazon has tapped Affirm to offer BNPL services through Amazon Business — marking Affirm’s first B2B pay-over-time offering for sole proprietors.

As PYMNTS reported, Amazon Business initiated the introduction of Affirm on Thursday (Nov. 2), for eligible sole proprietor businesses and is expected to be available at checkout for all eligible Amazon Business sole proprietor customers by Black Friday.

“We’re constantly striving to make Amazon Business the best place for small businesses to fulfill their buying needs,” Todd Heimes, director of Amazon Business Worldwide, said in the release. “Integrating Affirm as a payment option helps us do just that, while providing more flexibility and convenience to our customers. The technology, ease of integration and ability to support a broad range of transactions — especially as Affirm is already used by millions of Amazon customers today — make this a natural extension of our larger partnership.”

When selecting Affirm as their payment option at the Amazon Business checkout and providing necessary details, small business owners will promptly receive a credit decision. If approved, they can opt for pay-over-time installment plans ranging from three to 48 months, as outlined in the release.

“For example, a $200 purchase at 15% APR would cost a customer $34.81 for six months, totaling $208.84,” the report said.

Affirm initially made its debut on Amazon’s website and mobile app in 2021 and subsequently became a payment choice on Amazon Pay earlier this year.

The company’s deepened collaboration with Amazon coincides with small and medium-sized businesses (SMBs) exploring new avenues for funding due to the diminishing availability of traditional financing sources.

A recent PYMNTS report noted that SMBs might be motivated by a sense of immediacy, given that just 26% have the equivalent of at least 60 days’ worth of revenue readily available, and 17% lack immediate access to emergency funding.

Read more: Amazon Business Enters BNPL Space With Affirm Partnership

In August, Amazon and Chase extended their equal monthly payment option to cardholders, enabling Prime Visa and Amazon Visa cardmembers to utilize the installment payment service beyond Amazon’s website and mobile app.

At the time of the announcement, PYMNTS found that the expansion was happening at a time when installment payment offerings were showing continued popularity among consumers.

PYMNTS noted that offerings such as BNPL were likely to have seen a broader adoption as a preferred payment choice as consumers faced mounting financial pressures.

“We’ve seen this since the start,” Sezzle CEO Charlie Youakim said in an interview with PYMNTS’ Karen Webster. “Budgeting is top of mind … and BNPL is a budgeting tool.”

According to research conducted by his company and PYMNTS, it was revealed that the majority of consumers did not perceive BNPL as a credit product; instead, they viewed it as a means to effectively manage their cash flow.