Apple’s annual WWDC event has birthed a new disruption in the BNPL (buy now pay later) market that will likely change the leadership. The iPhonemaker announced during the event, the launch of its own buy now, pay later, sending the stock of Affirm down 6% on Monday.
Being the latest bigwig to join the burgeoning BNPL industry, Apple introduced new incentives that will give it a competition edge. Insider has the story.
The Cupertino company announced Apple Pay Later, which is fully integrated into Apple’s digital wallet and allows its users to pay back any purchase made with Apple Pay in four installments. Apple said its buy now, pay later option boasts zero interest rates and no late fees.
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The new payment option from Apple has long been rumoured, which is perhaps why Affirm pared its losses and traded down just 3% about one hour after Apple’s announcement. Still, Affirm is down 75% year-to-date, and is off more than 86% from its 52-week high.
Apple Pay Later is available wherever Apple Pay can be used, including for in-app purchases and shopping on the web. Additionally, the new payment installment plan is fully integrated with existing point-of-sale terminals, so retailers won’t need to upgrade their POS systems to enable Apple Pay Later.
Any purchase made with Apple Pay Later can be tracked and managed through the Apple Wallet app on the iPhone. Apple’s first foray into the buy now, pay later space was with its Apple Credit Card, which allowed users to make monthly installment payments with 0% interest for specific Apple products purchased at Apple Store locations.
Now Apple will compete with the likes of Affirm, Klarna, and Afterpay in the buy now, pay later space, but Apple highlighted its plans to launch the service were more of an effort to help its iPhone users completely replace their physical wallet. The company is working towards that goal by launching state-approved digital drivers licenses, among other features. It is not clear if, like others, Apple will use partnership to expand its BNPL business.
Apple stock traded up half a percent in Monday trades. The company also unveiled new MacBooks, and iOS 16 for the iPhone. Speculation has mounted that Apple may unveil an augmented reality product.