Apple enters BNPL market as regulation, competition intensifies – Marketingwithanoy

During his WWDC keynote, Apple announced a slew of changes and updates to its hardware and software. In the mix were expected improvements to the various operating systems and computers – and plans to expand its fintech footprint.

Apple has been growing as a consumer finance company for some time now, mainly thanks to the Apple Pay service and the launch of a branded credit card in recent years. While it has acquired a market footprint of sufficient size in the consumer financial technology market, it is not considered a fintech company per se.

That could change. During his WWDC address, Apple announced a new service called Apple Pay Later that will allow consumers to make mobile and online purchases in six weeks from the millions of U.S. retailers that already accept Apple Pay. The offer does not include fees or other charges, the company said, and only requires a “soft” credit check and review of the user’s transaction history with Apple.

This concept should sound familiar. Often described as “buy now, pay later” or BNPL, the installment payment method has become a startup favorite in recent years, with companies like Affirm (which has partnerships with Stripe and Amazon) driving the consumer credit option all the way to public markets. Klarna reached epic scale as a privately held BNPL company, and we recently saw Block buy Afterpay, a BNPL provider, and a merger between Sezzle and Zip.

“We are quickly seeing BNPL providers move towards more complete digital wallets that include ‘pay in one go’ in addition to installments, and we’ve seen traditional digital wallets such as PayPal add the ‘pay by installment’ feature. So it’s not surprising that Apple added this feature,” Dayna Ford, senior director of analyst at Gartner, told Marketingwithanoy via email. “BNPL has proven to be popular with consumers and merchants as a way to increase sales. It will likely help drive the use of Apple Pay and is a logical extension of their growing financial relationship with Apple users.”

“Banks, lenders and merchants need not view Apple Pay Later as a threat, but rather as an opportunity to carve their own niche in what has become the payment standard.” Jifiti CEO Yaacov Martin

Marketingwithanoy has reported on numerous BNPL startups around the world, each pursuing scale with modest model variations, sometimes targeting certain vertical markets or other forms of customer segmentation. How will all of these BNPL-focused carriers fare as Apple pushes its way into their market? We got an early look at what investors think, at least when Affirm’s stock sold in the wake of Apple’s news.

But that’s just one company, one result. What about outfits like Afterpay and Affirm? Will the news of Apple upset their apple carts? And what about the potential impact of Apple’s news on the smaller, regional, or otherwise niche-like BNPL players that have raised so much capital in recent years? Marketingwithanoy wanted to find out.


It is worth noting that the BNPL sector has been under some pressure in recent months. After Affirm’s stock price returned to Earth after a period of investor fantasy, Klarna was forced to rethink its fundraising hopes and lower its valuation to seek new capital.

The company remains on the defensive. Marketingwithanoy has written about the economics of the BNPL world here, if you want to go deeper.

To better understand Apple’s impact on the well-funded, if somewhat sick, market, Marketingwithanoy reached out to – and heard from – many of the major vendors in the BNPL space, including Affirm, Afterpay and split it. Klarna declined to comment.

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