Last Friday, Affirm, the buy now pay later (BNPL) company, announced a partnership to offer BNPL to Amazons’ customers — sending Affirm’s stock up 47%.

What’s the big deal? With Amazon as a partner, Affirm now has several of the biggest e-commerce giants offering its payment option.

• In the past few years, Affirm partnered with Walmart and Shopify (also an investor in Affirm).
• Between Amazon, Shopify and Walmart, over $650b in goods were sold online.

Affirm makes commission/interest when its BNPL payment option is used, so capturing even a small portion of that $650b would accelerate its sales.

But what investors don’t know is how much Affirm will take from Amazon’s sales — Amazon is known for being tough in negotiation terms with suppliers.

Market moves: The buy now pay later (BNPL) industry has been on fire with big news in recent months.

• Last month, Square acquired Afterpay, an Australian BNPL company, for $29b.
• Apple announced plans to launch BNPL payment options — partnering with Goldman in the US and Affirm in Canada.

Investors looking to benefit from BNPL’s growth can get exposure through Square (NYSE:SQ) or PayPal (NASDAQ:PYPL) — each with their own BNPL product.

After Square completes its Afterpay acquisition, the only pure-play BNPL company left on the stock market will be Affirm.

The bull case for BNPL: Credit cards make up nearly 24% of US consumer transactions but BNPL only make up 1.6% of North American e-commerce transactions.

The industry is still in its infancy and is expected to grow 22% annually over the next 7 years — as younger consumers increasingly prefer BNPL over credit cards.

Upcoming: Affirm will announce earnings on Sept 9.