Buy now, pay later (BNPL) is coming to Apple, but it’s not good news for the likes of Affirm, which has seen its stock price plummet.
Buy now, pay later (BNPL) services have been on the rise in recent years thanks to the success of companies such as Affirm, Zip Co, and European unicorn, Klarna.
But, as usual, in comes Big Tech with a big threat to these businesses.
What’s BNPL?
BNPL firms allow you to purchase something and pay for it later by splitting up the total cost of the item into several installments.
And according to reports, Apple is in cahoots with Goldman Sachs to develop a new ‘buy now pay later’ product, which sent Affirm shares plummeting last night, along with other BNPL stocks. This product will reportedly be called ‘Apple Pay Later’ — I wonder how much the marketing team got for that one?
It’s not too surprising to see companies such as Affirm suffer due to reports like this as it offers the possibility of a David versus Goliath battle that could see the smaller players priced out by businesses with near-limitless resources and brand influence.
But it’s not all doom n’ gloom.
Apple doesn’t exactly have a stranglehold on the digital payments sector — it doesn’t even release revenue figures for Apple Pay as it is negligible in the grand scheme of things. What’s more, antitrust regulators are unlikely to allow Apple to become a dominant player in online payments any time soon.
Finally, the BNPL industry is in its infancy and expected to grow to a value of almost $33.6 billion by 2027. There’s plenty of room for a number of players.
Though challenges will abound in the form of competitors, it would be unwise to make rash decisions based on Big Tech’s entrance to the field, which is inevitable in nearly every industry.
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