Apple Hits Record High as Company Plans to Offer a ‘Buy Now, Pay Later’ Option

According to a Bloomberg report, tech giant Apple is working on a service that would allow consumers to pay for purchases in installments.

Such a move would position the company in the “buy now, pay later” sector.

Bloomberg, citing sources familiar with the situation, has reported that Apple will use Goldman Sachs Group Inc, its partner since 2019 for the Apple Card credit card, as the lender for the
loans made through Apple Pay.

The sources asked not to be named discussing unannounced products.

The service will allow Apple Pay users to pay for their purchases through four interest-free payments made every two weeks or across several months with interest.

The interest rates that Apple plans to charge for the monthly installments was not revealed. Affirm charges as much as 30% APR, while other rivals charge less. The interest-free four installment plans would rival similar systems like ones from Afterpay Ltd, Klarna Bank AB and Sezzle Inc. in addition to PayPal’s popular Pay in 4 service, said Bloomberg.

Affirm fell 10% Tuesday on the news, while PayPal closed down just 0.6%. Afterpay dropped 9.6% in Sydney on Wednesday morning.

“We believe the concerns over the competitive impact of added BNPL offering by Apple are overblown,” Wedbush Securities analyst Moshe Katri said.

“All these Centre companies, including PayPal, Affirm already built ecosystem offering products and services around the merchants they serve. BNPL is just another product or service offered to merchants as a natural extension of Apple’s ecosystem.”

According to Citi analysts however, Apple Pay was a bigger threat than potential offerings from banks or credit companies given its wide reach and superior consumer experience on a mobile website or in-store.

A Zip spokesman said Apple’s reported move validated the company’s business where it was growing customer numbers despite increased competition.

Shares of Apple hit a record high of $148.48 on Wednesday.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.