Apple joins the ‘Buy Now, Pay Later’ party

Apple wants to squeeze more revenue out of its 1B+ iPhone users by offering a BNPL product.


July 19, 2021

You best believe Apple will squeeze every drop of juice it can from the iPhone (Source: Apple)

Here’s a question nearly every industry faces now: “What if [insert scary Big Tech firm] does what you’re doing?”

The latest example is the “Buy Now, Pay Later” (BNPL) market, where consumers pay for goods over multiple installments.

The model helps merchants sell customers on big ticket items and attract young shoppers who are shunning credit cards (but still want to spend).

Apple announced a BNPL product last week

And leading BNPL stocks fell: US-based Affirm dropped 10% while Australia-based Afterpay declined 7%.

Europe’s largest BNPL player is startup Klarna… we imagine investors of the $46B fintech firm said something along the lines of “Yo, WTF?”

Even with $195.5B in cash on hand…

Apple itself won’t be extending BNPL loans to consumers. That duty falls on Goldman Sachs, per Protocol.

For Apple, the move is a way to squeeze more juice out of its 1B+ iPhone users. The company’s services segment — including iCloud and Apple TV+ — generated $16.9B in the previous quarter (~20% of revenue).

A BNPL product will juice those numbers (and scare the living daylights out of competitors).

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