Despite a slight 3.8% downtrend in the FinTech Initial Public Offering (IPO) tracker, Affirm’s shares experienced a surge this week. They saw a rise of 7.8%, following an alliance with Apple Pay. The increase reflects investor confidence in this partnership.
The collaboration between Affirm and Apple Pay promises to broaden access to the latter across a myriad of users. As a result, Affirm has the possibility of diversifying its offerings and securing its position within the mobile payment market.
Making waves, Affirm defies the overall downward trend within the FinTech IPO sector. It shows industry resilience and the potential for dynamic growth, even amid uncertain market conditions.
Announced on June 14, 2024, the integration of Affirm with Apple Pay in the U.S promises convenience. Users are now able to apply for Buy Now, Pay Later (BNPL) loans via Affirm.
Affirm’s share growth following Apple Pay alliance
This strategic move makes the application process efficient.
Affirm’s CEO exhibits enthusiasm about the potential to make BNPL loans available to an even wider audience.
However, a filing with the Securities and Exchange Commission suggests that the partnership isn’t likely to boost Affirm’s revenues or gross merchandise volume for the 2025 fiscal year. This implies that although crucial, the strategic alliance may not result in immediate financial benefits for Affirm.
Recent statistics show that around 6% of consumers prefer Apple Pay as a payment method, exceeding the 4% PayPal usage rate. It shows an intense competition between the two digital payment giants.
Despite PayPal’s early entrance into the market, Apple Pay’s user-friendly interface and harmonious integration with Apple devices have gained popularity. It infers an increasing preference for Apple Pay as a primary method for digital transactions.
However, a sizable portion of consumers still resorts to traditional payment methods, showcasing an opportunity for digital payment platforms to penetrate the market further.
Looking ahead, Affirm is planning to introduce more flexible payment options with the ‘Pay in 2’ and ‘Pay in 30′ features aligning with over 30% of non-farm employees’ pay cycle. The move shows Affirm’s imminent response to accommodate individual income flows.
In contrast to Affirm’s success, other Fintech companies have seen varying results. While Huize and Robinhood observed share price increases of 2% and 1.5%, Nuvei’s shares dipped by 0.3%. The fluctuating share prices reflect the ever-evolving landscape of the FinTech market.
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