CUPERTINO, Calif.: In a move aimed at disrupting the fintech sector dominated by Affirm Holdings and Sweden’s Klarna, Apple this week launched its “buy now, pay later” (BNPL) service in the US, branded Apple Pay Later.
The company said Apple Pay Later will initially be offered to select users, before its full rollout 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 to those using iPhones and iPads to buy from merchants that accept Apple Pay, which totals 85 percent of U.S. retailers, it added.
“Apple Pay Later will absolutely topple some of the other players. Other companies would have taken a look at Apple’s announcement because they are a household name. This will take a piece of market share from other players,” said Danni Hewson, CEO. of financial analysis at AJ Bell, as cited by Reuters.
Covid-19 pandemic-related shutdowns in 2020 meant more shoppers, especially young people, turned to online payment platforms, benefiting 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, an analyst at DA Davidson, said: “We expect Apple to tread carefully, 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 credentials, the company said.