Apple is changing its course on its buy now, pay later (BNPL) ambitions, in a classic Google-like move they are shutting the service just ten months after its arrival. But now, there’s a twist in favor of partnering with established BNPL providers like Affirm.
This move after BNPL continues to surge in popularity. The pandemic accelerated the trend of online shopping, and BNPL options provide a convenient way to split purchases into installments. According to Adobe Analytics, BNPL loans fueled $75 billion in online spending in 2023.
This approach will allow Apple to move into this growing market without building and managing its own BNPL infrastructure. Apple talked about this benefit in a statement, revealing its goal to “bring flexible payments to more users, in more places across the globe.” They’ll collaborate with Apple Pay-enabled banks and lenders, with Affirm being the first confirmed partner.
This sounds a lot like what we see happening with debit cards. Regardless of which debit card a consumer uses to fund their purchases, as long as they use Apple Pay, it’s Apple that owns the experience.
said Sean Gelles, director of payments intelligence at J.D. Power.
This fall, iPhone users will be able to access new installment loan options directly through Apple Pay. They can apply for BNPL loans via Affirm during checkout or choose installments from credit and debit cards. Analysts say this strategy keeps Apple firmly in control.
Regardless of the chosen BNPL provider, Apple maintains the customer relationship as long as the transaction happens through Apple Pay.
Overall, this approach allows them to offer a wider range of BNPL options within the Apple Pay ecosystem, which will reach a larger audience and boost customer engagement.
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