The recent announcement of a partnership between Affirm and Apple has sparked interest among Apple device users, who will soon have the option to access buy now, pay later loans through their iPhones and iPads. This collaboration is set to provide users with additional payment choices and aims to blend the convenience of Apple Pay with the flexibility and transparency offered by Affirm.
The inclusion of Affirm’s services within Apple’s ecosystem is seen as a positive development for the buy now, pay later sector. Despite concerns that Apple’s own BNPL product might overshadow independent providers like Affirm, the decision to integrate Affirm’s offerings highlights the unique value proposition that the fintech company brings to the table. Affirm’s diverse range of longer-term repayment options distinguishes it from Apple’s existing four-installment plan, positioning it as a strong contender in the market.
Following the announcement, shares of Affirm experienced a 5% increase in late-morning trading, while Apple’s stock saw a rise of 6.2%. Analyst Dan Dolev from Mizuho Securities emphasized Affirm’s strong brand and sophisticated underwriting technology as key factors contributing to its competitive edge. Despite the positive reception from investors, Affirm acknowledged that the partnership with Apple may not have a significant impact on its revenue until fiscal year 2025.
In addition to incorporating Affirm’s buy now, pay later loans, Apple Pay is set to introduce installment loans through credit and debit cards in collaboration with Citigroup, Synchrony, and Fiserv-related issuers. This move reflects the growing popularity of BNPL-style installment loans, particularly in the wake of increased demand during the Covid pandemic. With over 500 million users worldwide, Apple Pay’s leading market share in the U.S. positions it as a key player in the mobile payment and digital wallet landscape.
As Affirm and Apple join forces to expand the array of financial services available to Apple device users, the buy now, pay later sector is poised for further growth and innovation. The integration of Affirm’s offerings within the Apple Pay ecosystem underscores the value of collaboration between fintech companies and tech giants, providing consumers with diverse payment options and enhancing the overall user experience. While the financial impact of this partnership may take time to materialize, the long-term prospects for both Affirm and Apple appear promising in the evolving landscape of digital payments.