Apple’s foray into the buy-now pay-later game represents “an obvious but likely only a modest risk” to established companies such as Affirm, privately held Klarna, and Block’s Afterpay, one analyst said.
Apple Inc. plans to enter the buy-now pay-later game with a new installment-pay offering, but it remains to be seen how much of an impact the tech giant’s move will have on the growing economy for split payments.
Still, Bernstein analyst Harshita Rawat didn’t see extreme cause for concern among incumbent players. Apple’s foray into BNPL represents “an obvious but likely only a modest risk” to established BNPL companies such as Affirm, privately held Klarna, and Block Inc.’s SQ, +1.69% Afterpay, in her view. As for the company’s move into BNPL with a new Apple Pay feature that will let consumers split purchases into four interest-free chunks, Rawat said that “the devil [is] in the details of execution,” and she deemed the BNPL market large enough to support multiple players.
Further, the company is starting off with an interest-free option that allows people to break purchases into four parts. “[B]roader adoption will require longer duration installment plans ,” she wrote in her note to clients.
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