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Affirm stock jumps on deal with Target ahead of holiday shopping

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Target New York store, August 15th 2021.

Scott Mlyn | CNBC

AffirmAfter retail chain, shares rose 15% TargetIt began to offer its customers an online loan option for purchase over $100.

Target claimed in a blog postIt’s now partnering with Affirm, a smaller competitor SezzleAs consumers get ready for holiday shopping season.

“We know our guests want easy and affordable payment options that work within their family’s budget,” says Gemma Kubat, Target’s president of financial and retail services, in the post.

BNPL (buy now and pay later) is an installment loan that comes with low interest rates. surgedIn popularity because retailers are responding to consumers’ demands for simple ways to pay, without taking on debt. BNPL providers often add a checkout button on a retailer’s website, and take a percentage from each merchant for every transaction.

RBC Capital Markets projects that the BNPL option will increase in value retail conversion rates20-30%, average ticket size 30-40%.

Affirm was listed on January 1st at $49 per share. Since then, its stock price has risen by more than 150% to $127.80 Wednesday. Affirm’s market capital has grown to over $35 billion.

A spokesperson for Affirm confirmed that Target had signed the deal and informed CNBC via email that 69% of Americans were interested in a “pay-over-time” solution during the holiday season.

The company’s biggest announcement was made in August when it said: AmazonSite users could use its services to purchase $50 and more. Affirm shares spiked 47%,The company was Amazon’s first-ever third-party provider for installment loans.

Affirm was partnered earlier in August with AppleTo offer financingFor iPhones, iPads, and Macs.

Affirm is not the only one seeing a boom in the BNPL market. SquareAugust: Australia to be bought AfterpayThis was the biggest tech deal ever, worth $29 billion. Klarna, a Swedish fintech company that specializes in financial technology, raised $29 billion at the June a.m. $46 billion valuationFollowing a partnership Macy’sIn late 2020.

Target stated in a post that Affirm is available to help customers get started. After filling out a Target cart, shoppers can pay through Affirm to choose a monthly payment.

Target claimed that Affirm won’t add any hidden charges or fees to your order and you’ll never be charged more.

WATCH: Affirm CEO says fintech has a long way to go

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