Apple goes into buy now, pay later (BNPL) party
Apple goes into buy now, pay later (BNPL) party and will cause problems for many fintechs in that space. With a total addressable market size of $30tn, that is a huge opportunity.
Klarna’s blitz of ads, influencers and reach across 250,000-plus merchants have helped it build a loyal consumer base. But Apple’s broader ecosystem makes its users stickier. A customer with Apple Pay might find it easier to make instalment payments. Klarna is lossmaking, while Apple’s bumper profits and multiple revenue streams give it flexibility to drive down fees and grab market share.
PayPal, which on Wednesday waived late fees on BNPL payments in Australia, has already shown the way. If Apple went ahead, it would be a blow to an overvalued sector already facing regulatory threats. But it would be far from a death knell. Instead, expect tamping down of valuations and a lot more consolidation.
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