The buy now, pay later (BNPL) services race is heating up with Affirm (NASDAQ:AFRM) in the spotlight this morning after a report it will team with Apple (NASDAQ:AAPL) on the transaction feature in Canada. AFRM stock gained more than 3% on Tuesday, trading more than three times the average daily volume.
Yesterday, Bloomberg reported that companies will unveil the initiative this month at Apple’s stores in Canada. Instead of paying for iPhones, Macs and iPads upfront, shoppers in Canada will have the option to use payment installments over 12 or 24 months.
As InvestorPlace Assistant News Writer Brenden Rearick wrote yesterday, San Francisco-based Affirm is one of the most popular installment-payment brokers in the space right now. Top clients include Peloton (NASDAQ:PTON), one of the many retailers hoping to cash in on modern payment installments.
As Rearick writes, “Affirm’s aggressive moves and affordable price are making it one of the most appealing BNPL brands from an investor perspective.”
BNPL Deals Lift AFRM Stock
This comes as welcome news to AFRM stock investors who have seen the share price more than halve from a mid February year-to-date high of $140.50 a piece.
So what else do you need to know? Apple told staff it will offer the Affirm program for a limited time. The products and reach of the deal will also be limited. It will only apply to iPhone, iPad and Mac purchases. Additionally, the deal with Affirm will be contained to Canada. For shoppers in the United States, Apple Card is a financing option.
As Rearick also wrote, interest in buy now, pay later services continues to grow. Earlier this week, investors cheered as Square (NYSE:SQ) announced its acquisition of Afterpay (OTCMKTS:AFTPY). Now Affirm and Swedish peer Klarna remain in the spotlight.
“At this point of time, everything is about momentum, you may describe it almost like a land grab currently,” Klarna CEO Sebastian Siemiatkowski told Yahoo Finance Live, later adding: “I think that there will be one or two more years of that before the market stabilizes slightly, and so we’re very excited about seeing how that’s going to play out.”
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including previous stints with Bloomberg News and as a buyside equity research editor.