SAN FRANCISCO >> Amazon is teaming with payments company Affirm to offer online shoppers a buy-now-pay-later option that does not involve credit cards.

San Francisco-based Affirm Holdings Inc. announced today that its flexible payment service will soon be available on Amazon.com.

The news sent Affirm’s stock up more than 35% in after-hours trading.

With the service, Amazon customers can split the total cost of purchases of $50 or more into monthly payments, and are told the total cost of the transaction up front. Affirm said there are no late fees.

Affirm said the two companies are testing the service with a group of customers and that it will be more broadly available in coming months.

Earlier this month, digital payments company Square Inc. acquired Afterpay, which provides a buy-now-pay-later option for merchants.

Installment plans are popular with retailers because they encourage customers to spend more money. And they enable customers with insufficient funds or credit at the time of purchase to walk out of a store — or check out online — with the item they want.