Apple Pay Later — A Threat to Other BNPL Services?

In March 2023, Apple grabbed the limelight with its latest update, rolling out a fresh feature – Apple Pay Later. This much-anticipated addition to Apple Wallet lets users slice their purchases into multiple payments, poised to shake up the BNPL (Buy Now Pay Later) arena, where Affirm and Klarna currently reign supreme.

Now that the dust has settled, let's take a quick look at Apple Pay Later and see what this new BNPL contender, courtesy of the tech behemoth, has in store.

What does Apple Pay Later actually offer?

Integrated within your Apple Wallet, the feature is designed to make purchases more affordable by dividing the product's full price into several payments. Users can apply for loans ranging from $50 to $1,000, payable in four installments over a 6-week period – all without fees or interest charges.

Though some folks are already throwing shade at the mere 1.5-month timeframe, this could be a game-changer for the US market, where weekly paychecks are the norm. It might just give customers the extra push they need to make more purchases.

How does Apple Pay Later work?

Once greenlit for a loan, users can choose the Pay Later option at checkout on their iPhone or iPad. Yup, you read that right – Apple Pay Later is currently exclusive to iPhones and iPads. The loans can be tracked and managed in the Wallet app, while due dates are also displayed (though users will still get a friendly nudge via notifications when payments are due).

What’s the current roll-out of the service?

Currently, Apple Pay Later is not available to everyone. To try out Apple Pay Later, you'll need an invitation from Apple. The company has stated that only a random selection of users will receive early access to the service.

Additionally, Apple Pay Later is currently only available in the US and can be used exclusively for online and in-app purchases made on devices running iOS 16.4 and iPadOS 16.4.

What should the eComm & BNLP markets expect?

With Apple Pay Later thrown into the mix, some industry insiders anticipate a fierce battle heating up. The sheer ubiquity of Apple's brand name could be the ace up its sleeve that propels the newbie service to new heights – and takes a bite out of the market share of other players.

According to Apple, a whopping 85% of US retailers already accept Apple Pay. Those online shops and eCommerce businesses operating in the US that haven't yet integrated Apple Pay into their checkout should seriously consider adding it as a payment option to keep their skin in the game.