Apple device users will soon have the option to access buy now, pay later loans through Affirm for their purchases. This collaboration between the two companies is set to provide more payment choices for U.S. Apple Pay users on their iPhones and iPads.
Affirm stated that this partnership will allow users to experience the convenience and security of Apple Pay, along with the flexibility, transparency, and absence of late or hidden fees that Affirm is known for. Unlike Apple’s BNPL product, which enables users to repay purchases in four installments over six weeks, Affirm offers a variety of longer-term options that can be repaid over a year or more.
There were concerns among investors when Apple introduced its own BNPL product last year that standalone providers like Affirm would be overshadowed. However, the decision to include Affirm products within the Apple ecosystem suggests that Affirm possesses unique qualities that set it apart from the competition. Mizuho Securities analyst Dan Dolev emphasized Affirm’s strong brand and sophisticated underwriting technology as factors contributing to its competitive edge.
Apple also announced that installment loans through credit and debit cards would be accessible on Apple Pay in the U.S. with issuers such as Citigroup, Synchrony, and Fiserv. This move reflects the growing popularity of BNPL-style installment loans among traditional credit card players following the surge in demand during the Covid pandemic.
Apple Pay boasts over 500 million users globally due to the widespread use of the iPhone, giving it a prominent position in the U.S. market for mobile payments and digital wallets. Following the news of the partnership, shares of Affirm rose by 5% and Apple’s stock increased by 6.2%. Despite the positive market response, Affirm clarified that the partnership is not expected to significantly impact its revenue or gross merchandise volume until fiscal year 2025.
The collaboration between Apple and Affirm marks a significant development in the buy now, pay later sector, providing consumers with more payment choices and expanding the reach of both companies in the digital payment landscape.