Recently, Bloomberg reported that Apple (AAPL  ) is working on a service to let iPhone users pay for purchases in installments, an announcement that sent shockwaves throughout the nascent "Buy Now, Pay Later" (BNPL) industry.

The world's richest company will use Goldman Sachs (GS  ) as a lender for these installment loans, an unnamed source told Bloomberg. The new service, called Apple Pay Later by insiders, won't be tied to the Apple Card and won't require one, paving the way for Apple to earn billions in transaction fees.

After all, Apple Pay is accepted by 85% of retailers, according to the company.

The application process for this new service will take place within the iPhone's Wallet app. After approval, users can split their payments into four interest-free installments, or chose to pay off their balance over several months, with interest, whenever they use Apple Pay.

Sources didn't disclose how much interest would be charged on these loans, but rates are expected to be competitive. BNPL giant Affirm Ltd charges as much as 30% on its monthly loans, but its rivals often charge less.

The news sent shares of the aforementioned Affirm Ltd (AFRM  ) tumbling by as much as 10%. Meanwhile, in Sydney, shares of Afterpay Ltd (AFTPY  ) closed down 9.6% in the wake of the Bloomberg story.

The BNPL sector has been booming as a crush of post-pandemic online shopping slams into digital storefronts. The BNPL has primarily boiled down to a few names whose dominance has gone unchallenged. However, if Bloomberg is to be believed, the likes of Zip Co (ZIZTF  ), Sezzle Inc, Klarna Bank, and even PayPal (PYPL  ) will have to square off against Apple with its considerable resources.

However, Truist analyst Andrew Jeffery indicates that it's too early to count out smaller players like Affirm. According to Jeffery, the 10% drop in that stocks price is an overreaction. The terms of Apple's new service remain subject to change, and Jeffery notes that it will debut with a much smaller total addressable market if it remains confined to the Apple Card.

When it comes to Affirm specifically, Mr. Jeffery notes its superiority over its "split pay" competitors in terms of merchant integration and underwriting abilities.

As of this writing, shares of Affirm are down 40.87% year to date. Meanwhile, Shares of Apple hit a record high last week.