Apple enters the BNPL market as regulation, competition intensify

For startups, headroom for mass-market BNPL products may be shrinking

During its WWDC keynote, Apple announced a bevy of changes and updates to its hardware and software. In the mix were anticipated improvements to its various operating systems and computers — and plans to expand its fintech footprint.

Apple has been growing as a consumer finance company for some time, most famously thanks to its Apple Pay service and the launch of a branded credit card in recent years. However, while it’s earned a market footprint of sufficient scale as to matter in the consumer financial technology market, it’s not considered a fintech company per se.

That could be changing. During its WWDC speech, Apple announced a new service called Apple Pay Later that will allow consumers to make mobile and online purchases sliced into four payments over six weeks at the millions of U.S. retailers that already accept Apple Pay. The offering won’t include fees or other charges, the company said, requiring only a “soft” credit check and review of the user’s transaction history with Apple.

This concept should be familiar. Often described as “buy now, pay later,” or BNPL, the installment payment method became a startup darling in recent years, with companies like Affirm (which has Stripe and Amazon partnerships) riding the consumer credit option all the way to the public markets. Klarna reached an epic scale as a private BNPL company, and we’ve recently seen Block buy Afterpay, a BNPL provider, and a merger between Sezzle and Zip.

“We are quickly seeing BNPL providers evolve into more full-featured digital wallets that include ‘pay in one’ in addition to installments, and we have seen traditional digital wallets such as PayPal add the pay-in-installment feature. So it is not surprising that Apple has added this feature,” Dayna Ford, senior director analyst at Gartner, told TechCrunch via email. “BNPL has proven to be popular among consumers and merchants as a way to increase sales. It is likely to help boost Apple Pay usage, and it is a logical extension of their growing financial relationship with Apple users.”

“Banks, lenders and merchants need not view Apple Pay Later as a threat but rather as an opportunity to carve out their own niche in what has become the payments standard.” Jifiti CEO Yaacov Martin

TechCrunch has reported on myriad BNPL startups around the world, each chasing scale with modest model variations, at times focusing on particular verticals or other forms of customer segmentation. How will all of these BNPL-focused providers fare with Apple pounding its way into their market? We got an early look at what investors are thinking, at least, when shares of Affirm sold off in the wake of Apple’s news.

But that’s just one company, one result. What about outfits like Afterpay and Affirm? Will Apple’s news upset their apple carts? And what should we consider the potential impact of Apple’s news on the smaller, regional or otherwise niche-y BNPL players that raised so very much capital in the last few years? TechCrunch wanted to find out.


It’s worth noting that the BNPL sector has been under some pressure in recent months. After Affirm’s share price came back to Earth following a period of investor fancy, Klarna was forced to change up its fundraising hopes, cutting its valuation to pursue new capital.

The company remains on the defensive. TechCrunch has written about the economics of the BNPL world here, if you would like to go deeper.

To get a better handle on how Apple will impact the well-funded, if slightly ill market, TechCrunch reached out to — and heard back from — many of the major vendors in the BNPL space, including Affirm, Afterpay and Splitit. Klarna declined to comment.