Apple Pay Later will be launched in the US in September.
With widespread layoffs and regulatory concerns, other BNPL providers are falling.
Apple has recently announced its plans of launching Apple Pay Later in September. Though the company did not use the term 'buy now, pay later' the upcoming service will allow consumers to pay in four installments over six weeks, making it a BNPL service.
The popularity of the BNPL industry has exploded tremendously in a short period: it grew from $33 billion in 2020 to $120 billion last year, according to GlobalData. The industry is now expected to grow at an annual rate of 26 percent.
Apple is known for entering markets with clear opportunities and potential growth, and its move into BNPL consumer finance now proves the same. Though it can legitimize the services of the relatively new industry, Apple’s market dominance can threaten the existence of the existing players.
“Apple devices are the gateway for many consumers shopping online. The more seamlessly they can integrate into the shopping experience, the less likely customers are to use other services,” Alykhan Sunderji, the Chief Council at Sunder Legal, told Finance Magnates.
And, Apple is following exactly this strategy. The tech giant is going to integrate its pay later services into its existing Apple Pay services. The service will require a 'soft' credit check of the consumer and a review of their transaction history with Apple.
Shannon Vissers, a Retail and Shopping Analyst at MerchantMaverick.com, explained: “Apple will have a competitive advantage, since its BNPL product makes it even easier for Apple users to take out a BNPL loan; for existing Apple Pay users, Apple's Pay Later will be just another effortless payment option that appears in your Apple Wallet.”
Advantage: Fair or Unfair?
The dominance of Apple Pay in the United States’ retail payments space will further push the Pay Later service. The number of Apple Pay users was estimated to be 507 million globally in 2020 after gaining 66 million that year. In addition, it captures 43.9 percent of the mobile payments market in the United States.
All these metrics clearly indicate that Apple Pay Later will have a major advantage in the BNPL sector.
Moreover, unlike Apple, most of the BNPL providers usually rely on their partnerships with other payment providers and e-commerce platforms. If those deals go sour, those platforms would lose their market share overnight. However, this is not even a concern for Apple Pay Later, as the tech giant has created a massive ecosystem over the years.
“But, [Apple Pay Later] won’t necessarily kill the BNPL business,” said Sunderji.
“We often see multiple checkout options on an e-commerce website because customers have different preferences. I think we will continue to see multiple options for BNPL, and these options will drive healthy competition to please customers.”
Interesting Timing
Additionally, Apple is launching its BNPL services when the majority of the industry is struggling. Affirm, which is one of the biggest BNPL players, has lost 3/4 of its stock value since the beginning of the year, and Klarna laid off 10 percent of its workforce in May.
Now, Apple’s move into space has pushed these BNPL stocks even lower.
“The more players there are in the industry, the harder it will be for each BNPL product to stand out from its competitors,” Vissers added. “It remains to be seen which players will remain standing in the end, but I think a year from now there will be fewer BNPL players than there are now. It's also not out of the question that Apple, PayPal, and/or Block might acquire and absorb some of their BNPL competitors.”
Upcoming Regulations
Regulation is another concern for the BNPL industry. The industry is now unregulated, but regulators actively considering tightening the industry.
One of the regulatory areas would be checking the financial history of potential consumers before allowing BNPL services. Apple has a clear advantage here.
“When Apple uses its own data to make a credit decision, it doesn’t have to comply with various regulations under the Fair Credit Reporting Act (like sending a formal notice if someone has been denied credit). But, we’ve seen that whenever consumers are offered easy credit in an unregulated environment, disaster is not far away,” said Sunderji.
Despite Apple’s entrance into the industry, the retail payment markets are too big. Apple Pay is dominant in the US and some other countries, but several local payment modes still dominate in Europe, Asia and other parts of the world.
“There are myriad factors working against BNPL at the moment: looming regulations, too many companies offering a nearly identical product, rising public skepticism of BNPL as we discover how financially harmful these products are to young consumers, rising interest rates and the increasingly real prospect of a recession in the coming months,” added Vissers.
“All that said, I don't think BNPL will disappear entirely. In a few years, there will still be two or three big BNPL players (likely including Apple), though the products will be more carefully regulated.”
Apple has recently announced its plans of launching Apple Pay Later in September. Though the company did not use the term 'buy now, pay later' the upcoming service will allow consumers to pay in four installments over six weeks, making it a BNPL service.
The popularity of the BNPL industry has exploded tremendously in a short period: it grew from $33 billion in 2020 to $120 billion last year, according to GlobalData. The industry is now expected to grow at an annual rate of 26 percent.
Apple is known for entering markets with clear opportunities and potential growth, and its move into BNPL consumer finance now proves the same. Though it can legitimize the services of the relatively new industry, Apple’s market dominance can threaten the existence of the existing players.
“Apple devices are the gateway for many consumers shopping online. The more seamlessly they can integrate into the shopping experience, the less likely customers are to use other services,” Alykhan Sunderji, the Chief Council at Sunder Legal, told Finance Magnates.
And, Apple is following exactly this strategy. The tech giant is going to integrate its pay later services into its existing Apple Pay services. The service will require a 'soft' credit check of the consumer and a review of their transaction history with Apple.
Shannon Vissers, a Retail and Shopping Analyst at MerchantMaverick.com, explained: “Apple will have a competitive advantage, since its BNPL product makes it even easier for Apple users to take out a BNPL loan; for existing Apple Pay users, Apple's Pay Later will be just another effortless payment option that appears in your Apple Wallet.”
Advantage: Fair or Unfair?
The dominance of Apple Pay in the United States’ retail payments space will further push the Pay Later service. The number of Apple Pay users was estimated to be 507 million globally in 2020 after gaining 66 million that year. In addition, it captures 43.9 percent of the mobile payments market in the United States.
All these metrics clearly indicate that Apple Pay Later will have a major advantage in the BNPL sector.
Moreover, unlike Apple, most of the BNPL providers usually rely on their partnerships with other payment providers and e-commerce platforms. If those deals go sour, those platforms would lose their market share overnight. However, this is not even a concern for Apple Pay Later, as the tech giant has created a massive ecosystem over the years.
“But, [Apple Pay Later] won’t necessarily kill the BNPL business,” said Sunderji.
“We often see multiple checkout options on an e-commerce website because customers have different preferences. I think we will continue to see multiple options for BNPL, and these options will drive healthy competition to please customers.”
Interesting Timing
Additionally, Apple is launching its BNPL services when the majority of the industry is struggling. Affirm, which is one of the biggest BNPL players, has lost 3/4 of its stock value since the beginning of the year, and Klarna laid off 10 percent of its workforce in May.
Now, Apple’s move into space has pushed these BNPL stocks even lower.
“The more players there are in the industry, the harder it will be for each BNPL product to stand out from its competitors,” Vissers added. “It remains to be seen which players will remain standing in the end, but I think a year from now there will be fewer BNPL players than there are now. It's also not out of the question that Apple, PayPal, and/or Block might acquire and absorb some of their BNPL competitors.”
Upcoming Regulations
Regulation is another concern for the BNPL industry. The industry is now unregulated, but regulators actively considering tightening the industry.
One of the regulatory areas would be checking the financial history of potential consumers before allowing BNPL services. Apple has a clear advantage here.
“When Apple uses its own data to make a credit decision, it doesn’t have to comply with various regulations under the Fair Credit Reporting Act (like sending a formal notice if someone has been denied credit). But, we’ve seen that whenever consumers are offered easy credit in an unregulated environment, disaster is not far away,” said Sunderji.
Despite Apple’s entrance into the industry, the retail payment markets are too big. Apple Pay is dominant in the US and some other countries, but several local payment modes still dominate in Europe, Asia and other parts of the world.
“There are myriad factors working against BNPL at the moment: looming regulations, too many companies offering a nearly identical product, rising public skepticism of BNPL as we discover how financially harmful these products are to young consumers, rising interest rates and the increasingly real prospect of a recession in the coming months,” added Vissers.
“All that said, I don't think BNPL will disappear entirely. In a few years, there will still be two or three big BNPL players (likely including Apple), though the products will be more carefully regulated.”
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Finance Magnates Annual Awards 2024 | FM Awards 2024 Highlights
Finance Magnates Annual Awards 2024 | FM Awards 2024 Highlights
🎥Catch the best moments from the Finance Magnates Annual Awards Gala Dinner!
An evening where top names in finance came together to celebrate achievements, enjoy live music, and connect over a memorable dinner. Watch the highlights and feel the energy of our first gala in Cyprus!
Congratulations to all the winners for their dedication to excellence and leadership in the financial industry, including XM, Trading PRO, FP Markets, Deriv, FxPro, LATAM, Headway, ATFX, FBS, AMEGA, EC Markets, Axi
For more information about the 1st Finance Magnates Annual Awards, visit https://bit.ly/3Zb7wNz
#FinanceMagnatesGala #IndustryExcellence #GalaHighlights #FinanceMagnatesAnnualAwards #FinanceMagnatesAwards #CelebratingSuccess #FinanceCommunity
🎥Catch the best moments from the Finance Magnates Annual Awards Gala Dinner!
An evening where top names in finance came together to celebrate achievements, enjoy live music, and connect over a memorable dinner. Watch the highlights and feel the energy of our first gala in Cyprus!
Congratulations to all the winners for their dedication to excellence and leadership in the financial industry, including XM, Trading PRO, FP Markets, Deriv, FxPro, LATAM, Headway, ATFX, FBS, AMEGA, EC Markets, Axi
For more information about the 1st Finance Magnates Annual Awards, visit https://bit.ly/3Zb7wNz
#FinanceMagnatesGala #IndustryExcellence #GalaHighlights #FinanceMagnatesAnnualAwards #FinanceMagnatesAwards #CelebratingSuccess #FinanceCommunity
FMLS:24 | Shaping the Next Era of Financial Evolution
FMLS:24 | Shaping the Next Era of Financial Evolution
Welcome to FMLS:24 – the premier event where influential brands and leaders in trading, payments, fintech, and digital assets come together!
Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
Whether you’re in finance, technology, or payments, this summit is your gateway to future growth, meaningful collaborations, and industry-leading insights.
👉 Don't miss out – secure your ticket now at https://events.financemagnates.com/ZQEYy0?utm_source=youtube&utm_campaign=fmls24-awareness&utm_medium=video&RefId=MLS%3A24+Video+Promo
#fmls #fmls24 #fmevents #financemagnates #forex #payments #crypto #events #london #fintech #ai #generativeai #technology #onlinetrading #forex #investing #investors #tech
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Welcome to FMLS:24 – the premier event where influential brands and leaders in trading, payments, fintech, and digital assets come together!
Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
Whether you’re in finance, technology, or payments, this summit is your gateway to future growth, meaningful collaborations, and industry-leading insights.
👉 Don't miss out – secure your ticket now at https://events.financemagnates.com/ZQEYy0?utm_source=youtube&utm_campaign=fmls24-awareness&utm_medium=video&RefId=MLS%3A24+Video+Promo
#fmls #fmls24 #fmevents #financemagnates #forex #payments #crypto #events #london #fintech #ai #generativeai #technology #onlinetrading #forex #investing #investors #tech
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!