Apple just made itself the elephant in the room of buy-now-pay-later.
With the sector struggling amid plunging stock prices, slowing growth and a looming economic downturn, Apple announced it was entering the BNPL space at its annual Worldwide Developers Conference (WWDC).
Apple Pay will gain a new feature, Apple Pay Later, which, like AfterPay, Klarna and countless imitators, allows people to split the cost of a purchase – in this instance made via n Apple Pay – across four equal payments over six weeks without interest or late fees.
The idea was first flagged around July last year, leverages the Mastercard network, and will roll out with iOS 16.
Craig Federighi, Apple’s senior vice president of Software Engineering said 16 will change the way people use their iPhone.
“We have reimagined how the Lock Screen looks and works with exciting new features that make it more personal and helpful, introduced iCloud Shared Photo Library for families, streamlined communication through new capabilities in Messages and Mail, and harnessed enhanced intelligence with updates to Live Text and Visual Look Up,” he said.
More on iOS 16 here.
Apple Pay Later will roll out in the US and is available everywhere Apple Pay is accepted online or in-app, using the Mastercard network. It will also feature Apple Pay Order Tracking, so users can receive detailed receipts and order tracking information in Wallet for Apple Pay purchases with participating merchants.
It will work for apps and the web and needs no further integration by developers or merchants.
The move is something of a pincer movement for the sector. with Amazon now offering a BNPL option in a partnership with Affirm, although there’s still plenty of market share to capture with estimates that the sector could be worth nearly US$40 billion by 2030.
However, the sector has yet to deal with increasing scrutiny from regulators amid concerns over lending risks and a lack of credit checks on users by some BNPL providers.
Block (ASX:SQ2) shares – the Square/Afterpay merger company – are falling again in early trade today, down around 1.5% to $114.11 in early trade, well below their $194 peak on March 30.
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