Title: Apple Pay to Feature Affirm Buy Now, Pay Later Loans Soon
Apple Pay users will soon have the option to utilize buy now, pay later loans from Affirm for their purchases, as announced by the companies. Affirm, a fintech company based in San Francisco, revealed that U.S. Apple Pay users on iPhones and iPads will see Affirm as a payment option later this year. Apple also confirmed this update.
According to Affirm, this integration will provide users with more payment choices, combining the convenience and security of Apple Pay with the flexibility, transparency, and absence of late or hidden fees that users appreciate in Affirm’s services.
This development is a significant boost for Affirm and the buy now, pay later industry as a whole. Despite initial concerns that Apple’s own BNPL product introduced last year would overshadow independent providers like Affirm, the decision to include Affirm products in the Apple ecosystem highlights the unique offerings of the fintech company.
While Apple’s BNPL loan structure allows users to repay purchases in four installments over six weeks, Affirm offers a range of longer-term options that can be repaid over a year or longer. Details regarding the terms of the new loans have not been disclosed by the companies.
Analyst Dan Dolev from Mizuho Securities emphasized that Affirm’s strong brand and advanced underwriting technology give the company a competitive advantage that Apple would find challenging to replicate independently.
In addition to Affirm, Apple also announced that installment loans via credit and debit cards would be accessible on Apple Pay in the U.S. with partners like Citigroup, Synchrony, and Fiserv-related issuers. Traditional credit card companies have started offering BNPL-style installment loans in response to the increased demand during the Covid pandemic.
Synchrony mentioned plans to provide personalized installment loans with promotions based on transaction size and merchants, potentially incorporating promotional interest rates and loan durations. This collaboration with Apple presents Synchrony with an opportunity to expand its flexible payment options and enhance its presence in the mobile payments ecosystem.
Apple Pay, with over 500 million users globally and a significant market share in the U.S., has become a leading platform for mobile payments and digital wallets due to the popularity of the iPhone.
Following the announcement, Affirm’s stock surged by 11% and Apple’s stock saw a 7.3% increase. Despite the positive market response, Affirm noted that the partnership with Apple is not expected to have a substantial impact on revenue or gross merchandise volume until fiscal year 2025.