What happened

Over the past few months, buy now, pay later specialist Affirm Holdings (NASDAQ:AFRM) has struck up partnerships with Amazon, with Shopify, and with Walmart. I suppose it was only a matter of time before Target (NYSE:TGT), too, would jump on the BNPL bandwagon.

And now it has. And Affirm stock is up 14.8% as of 1:11 p.m. EDT.

Arrow angles up on a green stock chart.

Image source: Getty Images.

So what

USA Today broke this story, reporting today that Target has inked partnerships with Affirm and with Australian BNPL company Sezzle to help its customers "take advantage of our best deals."  

Customers making small dollar value purchases will be able to use Sezzle to make payments over time with no interest or fees. Affirm will be offered as an option for customers spending more than $100 on a purchase at Target.

Now what

Now investors just need to see if all this retail enthusiasm for BNPL will translate into greater sales for the retailers that are partnering with Affirm to offer it.

Over and above the news itself, I think perhaps the most important bits of today's USA Today story (for investors) are the paper's observations that "interest in store credit cards plunged in 2021" and "consumers were still slightly more likely to use store credit cards for holiday shopping than the buy now, pay later installment plans."

That doesn't sound particularly propitious for Affirm's growth prospects -- its product is less popular than something else in which interest "plunged." On the other hand, the newspaper also found that "consumers who use buy now, pay later tend to be younger and some don't qualify for credit cards." Ultimately, therefore, the success of BNPL at Target, and at Walmart, Amazon, and Shopify, could depend on just how big that segment of customers who don't qualify for credit cards turns out to be.

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