Apple has taken a big step into the buy now, pay later (BNPL) industry.
The company announced this week Apple Pay Later, a new feature for Apple Pay that will let users pay for purchases in 4 installments over 6 weeks.
This puts it into direct competition with BNPL players like Affirm, Klarna, PayPal, and others vying for the growing market.
The buy now, pay later payment model mainly bring these two benefits to its stakeholders.
The first is to provide consumers with a seamless purchasing experience, breaking down an expensive transaction into smaller repayment amounts over the next few months.
The second is to help merchants increase online sales conversions and order values while lowering user acquisition costs.
By 2025, the global BNPL industry is expected to grow 10-15x its current volume to $1T in gross merchandise volume. With this growth, BNPL players face some formidable obstacles, as incumbent players including card issuers, payment networks, and digital wallets all ramp up efforts to jockey for real estate on merchant checkout pages.
The concepts of installment payments and point-of-sale financing are hardly new — but buy now, pay later providers are digitally native and primed for the direction the world is headed.
As BNPL companies see rapid growth, the industry as a whole will continue to expand into deeper, more frequent relationships with customers. Affirm’s savings and Klarna’s rewards offerings are forcing compelling incumbents to adapt to changing customer expectations.
In the meantime, Merchants and eCommerce platforms are betting that BNPL can increase its growth rate when the market is saturated.
Source : iSquare
Created by DonkeyStock | Aug 01, 2022
Created by DonkeyStock | Jul 20, 2022