Apple’s ‘Buy now pay later’ | Clever innovation or symptom of a developing fintech market?

Apple is typically ‘first’ in terms of category defining products and services. They know what the consumer wants and needs well before the consumer does. But in this case they are comfortable slotting in as a fast follower. Klarna and others have trailblazed their way into becoming an already developed fintech solution which, a business as large and powerful as Apple, is comfortable replicating and integrating into their own services. It is both a logical piece of innovation as well as a sign of a well developed fintech market.

Matt Cooper
Chief Commercial Officer of Crowdcube

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For nearly 20 years, commentators have predicted that the data advantage of tech giants like Apple and Google would allow them to take over the banking market. While both firms recently moved into the payments market, they have wisely shied away from the riskier lending market. Apple’s move into BNPL therefore represents an interesting crossing of the rubicon. Is it wise?

At Hokodo we’ve seen that the skills to use “big data” for credit decisions are very different to those needed to optimise marketing offers, for example. Is Apple’s move wise? Only time will tell, but they might have been better advised to partner with a fintech who actually understands how to make data-based lending decisions. As Apple’s partner, it’s not obvious that Goldman Sachs ticks that box.

Richard Thornton
Co-CEO & Co-Founder of Hokodo

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Apple Pay’s buy now pay later (BNPL) features signals that this fairly recent financial service is now mainstream. It won’t be long before card acquirers will start to offer white label BNPL as an optional extra to merchants. This development should be celebrated. BNPL wasn’t’ created by banks but by fintechs like Klarna, Affirm and others – it heralds the new state of the financial services market where experimental business models become proven and then emerge as mainstream financial services.

Alex Mifsud
CEO & Co-Founder of Weavr

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I wouldn’t say it’s particularly innovative, there are a number of products in the market that allow customers to spread the cost of purchases via debit card, commonly used through ApplePay. Therefore, it’s a natural progression for Apple to cut them out and do it themselves. Niche providers of BNPL if they’re built and designed for specific sectors (E.G. car repairs) will always have an edge over generalists, if they’re fully embedded in the customer journey.

James Jackson
Co-Founder & CEO of BUMPER

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Apple has been expanding it’s payment services over the last years and a BNPL integration shouldn’t come as a surprise. Allowing shoppers to pay later in installments is a reality in the fashion and footwear industries and it’s natural to expect an expansion into other categories. Klarna’s valuation at USD $46 billion is not a coincidence. Adding this feature might also boost Apple Pay usage in Apple’s physical stores where BNPL can prove an attractive option for premium product purchases.

Francesca Carlesi
Co-Founder & CEO of Molo

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