A survey by Mizuho shows that Affirm Holdings ( AFRM ) is the preferred installment payment service among Apple ( NASDAQ: ) Pay users, potentially offering insight into why Apple chose recently partnered with Affirm.
“The survey shows that Affirm is the leading installment payment service for Apple Pay users, with 44% of respondents choosing AFRM,” says Mizuho. More than 550 people participated in the survey, of which approximately 20% said they use both Apple Pay and credit card payment services.
Mizuho points to the significant overlap between users of Affirm and Apple’s installment payment service, suggesting this as a possible reason for the newly announced partnership. Thanks to this partnership, Apple Pay users will be able to use Affirm to pay for online purchases, and it is expected that they will also be able to do so in physical stores in the future.
“The shared user base between AFRM and Apple Pay may explain the reason for the partnership announced this week,” comments Mizuho. While Affirm’s advanced technology and risk assessment processes were initially cited as key reasons for the partnership, research findings suggest that the compatibility of client bases is also an important factor.
Additionally, Mizuho’s research shows that of all the installment payment services, users of Apple’s installment payment option are the most likely to also use Affirm. This suggests that users can easily switch from Affirm’s app to Apple’s installment payment service.
“This could offer users a seamless transition from using the Affirm app to Apple’s installment payment service,” Mizuho notes. According to Mizuho, ​​this could lead to an increase in the number of users choosing Affirm over time, as it becomes possible to use Apple Pay to make payments at merchants that do not have a direct partnership with Affirm.
Mizuho maintains a Buy recommendation on Affirm’s stock and has set a $65 price target, believing that the partnership with Apple is a favorable development for Affirm.
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