Apple device users are in for a treat as they will soon have the option to utilize buy now, pay later loans from Affirm for their purchases. Affirm, a fintech company based in San Francisco, announced that it will be available as a payment choice for U.S. Apple Pay users on iPhones and iPads later this year. This partnership aims to provide users with more payment options while ensuring the ease, convenience, and security of Apple Pay, combined with the flexibility, transparency, and absence of late or hidden fees that Affirm is known for.
The inclusion of Affirm’s services in the Apple ecosystem is a positive development for both Affirm and the buy now, pay later sector as a whole. Despite concerns raised by investors when Apple introduced its own BNPL product last year, the decision to incorporate Affirm’s offerings indicates that the fintech company has unique value to offer. Unlike Apple’s BNPL loans, which allow users to repay purchases in four installments over six weeks, Affirm provides longer-term options that can be paid back over a duration of a year or more. This diversity in loan offerings sets Affirm apart and suggests that it has a competitive edge over other providers.
In addition to the partnership with Affirm, Apple also announced that installment loans via credit and debit cards will be accessible through Apple Pay in the U.S. with issuers such as Citigroup, Synchrony, and Fiserv. Traditional credit card players have begun to offer BNPL-style installment loans in response to the rising popularity of such payment methods during the Covid pandemic. Apple Pay’s widespread usage, with over 500 million users globally and a significant share of the U.S. market, positions it as a leader in the mobile payment and digital wallet platform industry.
Market Response and Revenue Outlook
Following the news of the partnership, shares of Affirm rose by 5% in late-morning trading, while Apple’s stock saw a 6.2% increase. Despite the positive market response, Affirm cautioned that it would take time for the collaboration to have a substantial impact on its revenue. The company stated that it does not expect the partnership to significantly boost its revenue or gross merchandise volume until fiscal year 2025. Nevertheless, analysts believe that Affirm’s strong brand and advanced underwriting technology give it a competitive advantage that Apple would find challenging to duplicate.
The partnership between Apple and Affirm to offer buy now, pay later loans presents an exciting opportunity for Apple device users to access a wider range of payment options in a seamless and secure manner. By leveraging the strengths of both companies, this collaboration has the potential to reshape the landscape of digital payments and further drive the growth of the buy now, pay later sector.