Why Apple’s Pay Later Feature Could Be Bad News for Affirm and Klarna


Apple will soon give its users the ability to spend big and pay it off over time, which is something competing services should be concerned about.

At WWDC 2022, Apple introduced a new feature called Pay Later as part of Apple Pay. This is exactly what it sounds like: the ability to make a purchase and pay it off over time. This feature is something that entire companies have built their businesses on.

With Apple Pay Later on the way, how concerned should other buy now, pay later services like Affirm, Klarna, and Afterpay be? Considering Apple’s user base, other companies should, at the very least, pay attention to what’s coming.

What Is Apple Pay Later?

Apple Pay Later is a feature coming to Apple Pay. Instead of paying how you would normally pay, your purchase is split into four payments that you pay over the course of six weeks. Like other buy now, pay later services, it’s an alternative to using credit cards for larger purchases.

Pay Later will be built directly into Apple Pay. This means that you can use Apple Pay to pay in stores or online, then decide to split the payment up later if you decide. You need to connect a debit card to pay, as this feature is completely separate from the Apple Card. You can view your bill and remaining payments within the Apple Wallet app.

How Is Pay Later Bad News for Other Services?

Buy now, pay later companies like Affirm and Klarna should be concerned about Apple’s Pay Later feature, and here’s why. Looking at the US market share, Apple’s iPhone has around 50 percent of the smartphone market. If Apple Pay Later is already built into the smartphones of half your potential market, you take notice.

Apple users tend to spend more than Android users as well, which means that not only are competitors missing out on potential customers but potential customers that spend more. Even though Apple’s offering may not draw customers away from Affirm, Klarna, or Afterpay, it will probably slow down the rate at which new customers sign up.

Now, Apple seems to be taking a slightly different approach from competitors. While Affirm and Klarna focus on partnering with retailers, Apple doesn’t seem to be taking this approach. It also remains to be seen when Apple Pay Later will arrive.

When Is Pay Later Arriving?

Tim Cook has said that Apple Pay Later is arriving “soon,” according to CNBC. Apple previously said that Pay Later would arrive in September 2022, and we have yet to see it launch as of February 2023.

There is precedent for Apple announcing features and products that never make it to market, so that could still possibly happen here. Meanwhile, if you’re eyeing a big purchase, you can always pay over time using the Apple Card, which is limited to Apple products.

All Eyes on Apple Pay Later

Pay Later being built directly into the Wallet app as a payment method gives Apple an entrenched position, meaning it won’t have the same struggles as other buy now, pay later services.

Apple probably won’t take over this industry the way it did the digital music industry with the launch of the iPod, but undoubtedly, other companies are nervous.

Regardless of how much Pay Later takes off, assuming it launches, it will be important because it’s Apple launching it. Look no further than the Apple Card for proof of how important that can be.


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