Apple Pay Later Is Not a Slam Dunk

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Apple Pay Later Is Not a Slam Dunk

It’s been nearly two years in the making, but Apple triumphantly announced this week that it is introducing Apple Pay Later, probably the most important entrant into the Buy Now, Pay Later (BNPL) sector in several years. The basics are unexciting, but somewhat significant within the sector: purchases between $50 and $1000 can be split into four payments over six weeks, with no interest and no fees. Starting in the fall, Apple says it will begin reporting Pay Later payments to credit bureaus, which is a big consumer advance—if you’re paying your bills on time, you should get credit for it—that the incumbent BNPL sector has not uniformly embraced with gusto.

Apple Pay Later comes onstage with at least one massive advantage: the popularity of Apple Pay, especially in the United States and Europe; Apple is the second most popular digital wallet in the US, after PayPal. Approximately 25% of all mobile wallets worldwide are Apple Pay, giving the company a tremendous base on which to build a BNPL superstructure. In most instances, you’d assume that a huge tech company, with its tentacles in multiple businesses, entering a niche market would likely crush all competitors.

Judging from stock movements, investors bought that idea…for a few hours.