Member Exclusive, Payments

Payments Briefing: Is the ‘Apple Pay Later’ hype warranted?

  • This week, we review the hype around Apple Pay Later and try to determine how much of it is justified.
  • We also look at Square’s move to bring Afterpay to in-store purchases, making it even easier to pay in four – and how this greater ease could lead to overspending and growing consumer debt.
close

Email a Friend

Payments Briefing: Is the ‘Apple Pay Later’ hype warranted?

At this year’s Worldwide Developers Conference, Apple announced a major update called Apple Pay Later, scheduled for launch with iOS 16 this September, which will allow US users to split up their Apple Pay purchases into four equal installments spread over six weeks, without interest or late fees.

Apple Pay Later runs on the Mastercard network, and can be used anywhere Apple Pay is accepted online or in-app. However, the service will not be available for point-of-sale transactions.

This marks Apple’s long-awaited (some would say, long-feared) entry into the massive BNPL sector, and will see the tech giant take on comparable offerings from current leaders in the space like PayPal, Affirm, Afterpay, Klarna, and Sezzle.

As is the case with most announcements involving an Apple product or feature, the Apple Pay Later news has attracted a lot of hype in the media and across the tech world.

The news comes at an uncertain time for the BNPL industry, owing to slow economic growth, rising inflation, and higher interest rates. Klarna recently laid off 10% of its global workforce, citing the impending recession and the onset of war in Ukraine as primary reasons. The firm is reportedly discussing raising funds at a $15 billion valuation – substantially lower than its $46 billion valuation last June.

Last year, Klarna’s total losses doubled to reach $487 million. Other operators in the space have also been struggling to achieve profitability. Affirm reported net losses of around $430 million for the fiscal year ending in June 2021, while Afterpay’s annual losses jumped to $345 million last year. 

 


This content is available exclusively to Tearsheet Outlier members.

Tearsheet Outlier information and signup Missing out? Subscribe today and you’ll receive unlimited access to all Tearsheet content, original research, exclusive webinars and events, member-only newsletters from Tearsheet editors and reporters and much more. Join Outlier now — only $49/mo. Already an Outlier member? Sign in to your account

0 comments on “Payments Briefing: Is the ‘Apple Pay Later’ hype warranted?”

Payments, Power of Payments Podcast

Power of Payments Ep. 14: JPMorgan vs Stripe and Block, CFPB is coming for BNPL, and is LTO a viable BNPL alternative?

  • This week, we talk about JPMorgan’s acquisition of payments firms Renovite, and the CFPB’s recent report on BNPL firms, which suggests that regulation is coming for the sector.
  • We also discuss why lease-to-own, which is another type of installment payment option, has been gaining popularity in recent months.
Ismail Umar | September 23, 2022
Payments

Takeaways from Tearsheet’s Power of Payments conference last week

  • Last week, Tearsheet hosted its inaugural T-POP Conference, focused on payments.
  • Here are the major challenges and opportunities we zeroed in on at the event as we plan for the future of payments.
Zachary Miller | September 21, 2022
Member Exclusive, Payments

‘It’s new branding to what is a very classic industry’: Ramp’s Eric Glyman on B2B BNPL, and how their new offering is different

  • What's the secret sauce behind Ramp's doubling valuation and revenue growth amid a fintech downturn?
  • Eric Glyman, co-founder and CEO of Ramp, spills the beans on his company strategies and what's in the offing.
Sara Khairi | September 13, 2022
Member Exclusive, Payments

Payments Briefing: Does lease-to-own provide a “recession-proof” alternative to BNPL?

  • This week, we explore lease-to-own, an installment payment option that has been gaining popularity in recent months.
  • We also discuss SMBs' increasing reliance on cross-border payments, and the steps that providers can take to serve them better.
Ismail Umar | September 09, 2022
Payments, Power of Payments Podcast

Power of Payments Ep. 13: ‘You need to have a good answer to the question, how do you get to profitability?’ – Rapyd’s Eric Rosenthal

  • Eric Rosenthal, vice president of corporate development, strategy and partnerships at Rapyd, joins host Ismail Umar on this week’s podcast.
  • He talks about how Rapyd caters to businesses of different sizes including major firms like Uber, what American companies can learn from payments firms in Latin America, Asia, and Europe, and how startups in the space should try to deal with the current downturn.
Ismail Umar | September 09, 2022
More Articles