Recently, Bloomberg reported that Apple
The world's richest company will use Goldman Sachs
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 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
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.