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Apple Introduces "Buy Now, Pay Later" Scheme In The US

Apple Introduces "Buy Now, Pay Later" Scheme In The US
With the launch of its "buy now, pay later" (BNPL) service in the US, Apple Inc. has the potential to upend the fintech industry, which is currently dominated by companies like Affirm Holdings and the Swedish payments company Klarna.
According to the firm, Apple Pay Later will let customers split purchases into four installments spaced out over six weeks with no interest or fees. It will first be made available to a small number of customers, with intentions to roll it out to everyone in the upcoming months.
According to the company, customers can acquire loans between $50 and $1,000 for online and in-app purchases made on iPhones and iPads at businesses that use Apple Pay.
According to the firm, Apple Pay is accepted at more than 85% of U.S. retailers.
"Apple Pay Later will absolutely wallop some of the other players. Other companies would've taken a look at Apple's announcement today 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.
Affirm, a BNPL company, saw a more than 7% share price decline, while PayPal closed down approximately 1%.
Pandemic-related lockdowns in 2020 drove users to online payment platforms, driving up demand for fintech firms that provide BNPL services, particularly among millennials and Gen Z clients.
Big players in digital payments like PayPal and Block Inc have entered the market through acquisitions, and Affirm went public with a multibillion dollar IPO.
Since then, the sector's fortunes have changed as a result of sizzling inflation and rising interest rates that have reduced consumer spending power.
"We expect Apple to tread cautiously, especially in this macro environment," said Christopher Brendler, analyst at D.A. Davidson, alluding to its decision to not use a partner and underwrite, fund, and collect on the loans directly.
According to the business, the Mastercard Installments program enables Apple Pay Later, and Goldman Sachs issued the Mastercard payment credential.

Christopher J. Mitchell

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