Apple to disrupt fintech with 'Apple Pay Later' consumer service

Robert Besser
01 Apr 2023, 04:40 GMT+10

To disrupt the fintech sector dominated by Affirm Holdings and Sweden's Klarna, this week Apple launched its "buy now, pay later" service in the US
The company said that Apple Pay Later will initially be offered to select users, before its full roll-out in the coming months
Loans of between $50 and $1,000 for online and in-app purchases will be available for those using iPhones and iPads to buy from merchants that accept Apple Pay

CUPERTINO, California: In a move aimed at disrupting the fintech sector dominated by Affirm Holdings and Sweden's Klarna, this week Apple launched its "buy now, pay later" (BNPL) service in the US, labeled Apple Pay Later.

The company said that Apple Pay Later will initially be offered to select users, before its full roll-out in the coming months, allowing them to split purchases into four payments spread over six weeks with no interest or fees.

Loans of between $50 and $1,000 for online and in-app purchases will be available for those using iPhones and iPads to buy from merchants that accept Apple Pay, which total 85 percent of US retailers, it added.

"Apple Pay Later will absolutely wallop some of the other players. Other companies would have taken a look at Apple's announcement because they are an ubiquitous name. This will take a bite out of the market share of other players," said Danni Hewson, head of financial analysis at AJ Bell, as quoted by Reuters.

COVID-19 pandemic-related lockdowns in 2020 meant that more shoppers, especially young people, turned to online payment platforms, benefitting fintech companies offering Buy Now Pay Later services.

Digital payments giants, such as PayPal and Block, have expanded into the sector through acquisitions, while Affirm went public in a multi-billion dollar listing.

Christopher Brendler, analyst at D.A. Davidson, said, "We expect Apple to tread cautiously, especially in this macro environment," according to Reuters.

Apple Pay Later is enabled through the Mastercard Installments program, and Goldman Sachs was the issuer of the Mastercard payment credential, the company said.

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