Apple has announced the launch of its new service, Apple Pay Later, which could potentially disrupt the buy now, pay later (BNPL) space. The service will allow users to make purchases and pay for them later in installments, interest-free.
Apple Pay Later Could Upend BNPL Space
Apple has announced the launch of its new service, Apple Pay Later, which could potentially disrupt the buy now, pay later (BNPL) space. The service will allow users to make purchases and pay for them later in installments, interest-free.
Apple Pay Later will offer two payment options: “Pay in Installments” and “Apple Pay Later.” Pay in Installments will allow users to split their purchase into four interest-free payments made every two weeks. Apple Pay Later will allow users to pay for their purchases at a later date, interest-free, with the option to pay in full or over time with interest.
The service will be available to Apple Pay users in the United States later this year. It will also be integrated into the Wallet app and will work with Apple Card.
The announcement of Apple Pay Later has caused some concern for BNPL companies such as Afterpay, Klarna, and Affirm. These companies have seen significant growth in recent years, with Afterpay alone reporting a 90% increase in active customers in the United States in the first half of 2021.
However, some experts believe that Apple Pay Later may not necessarily be a direct threat to BNPL companies. According to a report by CNBC, Apple Pay Later may actually help to increase awareness and adoption of BNPL services, as it will introduce the concept to a wider audience.
“Apple Pay Later will be a net positive for the BNPL space,” said Tom Johnson, CEO of fintech company AeroPay. “It will bring more awareness to the space and help to educate consumers on the benefits of BNPL.”
Others believe that Apple Pay Later could potentially disrupt the BNPL space by offering a more seamless and integrated experience for users. Apple Pay Later will be integrated into the Wallet app, which is already widely used by Apple users for mobile payments.
“Apple Pay Later will be a game-changer for the BNPL space,” said John Koetsier, a mobile economist and analyst. “It will offer a more seamless and integrated experience for users, which could potentially attract more users to BNPL services.”
Apple Pay Later will also offer users the ability to manage their payments directly within the Wallet app, which could make the process of paying for purchases more convenient and user-friendly.
The launch of Apple Pay Later comes at a time when the BNPL space is already facing increased scrutiny from regulators. In the United States, the Consumer Financial Protection Bureau (CFPB) recently announced that it will be conducting an inquiry into the BNPL industry to assess potential risks to consumers.
It remains to be seen how Apple Pay Later will impact the BNPL space, but it is clear that the service has the potential to disrupt the industry and change the way consumers think about paying for purchases. As the BNPL space continues to evolve, it will be interesting to see how companies like Afterpay, Klarna, and Affirm respond to the challenge posed by Apple Pay Later.
Sources:
https://www.cnbc.com/2021/08/04/apple-pay-later-could-boost-buy-now-pay-later-space-experts-say.html
https://www.theverge.com/2021/8/3/22607425/apple-pay-later-announced-interest-free-installments-credit-card
