Shares of some financing companies fell by more than 14% following the news.
What you need to know
- Apple is reportedly working on an 'Apple Pay Later' service.
- It could let users make purchases with Apple Pay and then pay off the money over time.
- The rumor has sent the shares of potential rival services tumbling.
A new report that Apple is working on an 'Apple Pay Later' feature has sent the shares of potential rival firms tumbling.
As reported by Reuters:
A report that Apple Inc is working on a service to let users pay for purchases in installments dragged down shares in the 'buy now, pay later' sector, which has thrived during the pandemic as online shoppers look for easier repayment options.
Specifically, the report notes Australian firm Afterpay, the countries biggest BNPL (buy now pay later) firm, the shares of which fell nearly 10% Wednesday, it also notes smaller firms:
Smaller rivals Zip Co Ltd and Sezzle fell sharply. Nasdaq-listed Affirm Holdings Inc tumbled more than 14% on Tuesday following the Bloomberg report and closed 10.5% lower.
According to Bloomberg Apple is working on an 'Apple Pay Later' scheme that would let users pay for Apple Pay purchases over time, using Goldman Sachs Group as the lender for the loans that would be needed for installment offerings. Bloomberg says the new service isn't tied to Apple Card, which is also backed by GS and offers some financing options for customers who want to buy Apple products like the iPhone 12.
According to Bloomberg, users will be able to split payments into four interest-free installments, or over longer periods with interest, much like other BNPL companies.
Apple Card
APR: 12.99% - 23.99%
Bottom line: It's odd reviewing a credit card, but the truth is, Apple Card really is something different.