Please ensure Javascript is enabled for purposes of website accessibility

Why Shopify Stock Soared Today

By Joe Tenebruso - May 13, 2022 at 6:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A blockbuster partnership could help to turbocharge the e-commerce leader's growth.

What happened

Shares of Shopify (SHOP -3.14%) jumped 13.6% on Friday after the online retail platform extended its collaboration with buy now, pay later (BNPL) services provider Affirm (AFRM 0.20%)

So what

The multi-year deal keeps Affirm as Shopify's exclusive BNPL partner in the U.S. Affirm will power Shopify's Shop Pay Installments service, which has proved popular with online business owners and consumers alike.

As part of the deal, Affirm will make its Adaptive Checkout product available to Shopify's merchants. The technology presents biweekly and monthly payment options in a streamlined checkout process. The new system will make it possible for shoppers to use Shop Pay for purchases ranging from $50 to $17,500, with payment terms of up to 12 months.

"Last year, we chose to partner with Affirm in the U.S. due to their technology and expertise in buy now, pay later solutions, and their commitment to transparency and never charging late or hidden fees," Shopify executive Shruti Patel said in a press release. "As we extend our partnership with Affirm in the U.S., we look forward to helping our merchants deliver even more flexibility and choice to their buyers."

People are smiling while making an online purchase.

Image source: Getty Images.

Now what 

Merchants love Shopify's installment payment service because it's been shown to boost sales by increasing checkout conversion rates. Shoppers love it because it allows them to spread out payments over time, often interest-free.

By adding value to both e-commerce businesses and their customers, Shopify hopes that its deal with Affirm will help to fuel its growth. Judging by its stock's performance today, investors think it will do just that.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Shopify Inc. Stock Quote
Shopify Inc.
$348.66 (-3.14%) $-11.29
Affirm Holdings, Inc. Stock Quote
Affirm Holdings, Inc.
$23.00 (0.20%) $0.05

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.