American multinational technology company Apple is reportedly teaming up with the US-based investment bank and financial services firm Goldman Sachs to turn every Apple Pay transaction into a potential “buy now, pay later” (BNPL) opportunity.
According to people familiar with the matter, the US tech giant is using Goldman Sachs, its partner since 2019 for the Apple Card credit card, as the lender for the loans.
Shares of Australia-listed Afterpay, the country’s biggest BNPL provider, slid close to 10 percent in trading. Smaller rival Zip Co Ltd and Sezzle also fell sharply. Nasdaq-listed Affirm tumbled more than 14 percent last day before closing down 10.5 percent.
Over the past year, the BNPL industry has boomed due to a pandemic-driven surge in online shopping. The trend has also attracted the attention of mainstream firms such as PayPal.
The prospect of going up against a company the size of Apple, as well as other likely entrants, would be a major test to BNPL firms which have so far gone largely unchallenged.
According to reports, Apple Pay users would be allowed to split their payments into four interest-free installments, or across several months with interest. However, it is not clear when Apple might launch the service or how much interest it might charge.
A Goldman Sachs spokesperson declined to comment. Apple was not immediately available for comment. Such an offering would rival similar services by Klarna, Afterpay, Zip’s Quadpay and Affirm in the US, the sector’s key growth market where competition is high.
PayPal has launched its BNPL service in Australia, challenging Afterpay on its home turf where the US payments giant said it would do away with late fees, an area that earned Afterpay close to $70 million in fiscal 2020.
A Zip spokesman said Apple’s reported move was “validation that what Zip has been doing is resonating with customers and merchants” and that it was growing customer numbers despite increased competition.