Apple has partnered with Affirm to launch a "buy now, pay later" installment payment service for its users on iPhones and iPads later this year. On Tuesday, Affirm's stock price surged more than 11%. Analysis suggests that with its strong brand influence and advanced risk evaluation technology, Affirm has built a competitive advantage that is hard to match for Apple.
$Apple (AAPL.US)$will partner with$Affirm Holdings (AFRM.US)$to provide a "buy now, pay later" installment payment service for users later this year.
On Tuesday Eastern Time, Affirm announced that Apple Pay users will soon have access to Affirm's "buy now, pay later" loan service. This new feature will be available on iPhones and iPads in the United States later this year. In a statement in the email, Affirm said:
"This move will bring users more diverse payment options, while retaining the convenience and safety features of Apple Pay, as well as the flexible and transparent payment experience advocated by Affirm, without any delays or hidden fees."
Apple also announced on its website on Tuesday:
Apple Pay has brought unprecedented flexibility and selection to users for online shopping and in-app payment. Users can now easily view rewards and redeem them, and use qualifying credit or debit card installment loan services when making online or in-app purchases on their iPhones and iPads. These innovative features will be available to all Apple Pay partner banks and issuers supporting the market. Among them, US users will also enjoy the convenience of applying for Affirm loans directly when checking out through Apple Pay.
Although Affirm expects this partnership to have little impact on revenue in the fiscal year 2025, significant revenue growth will take time. However, its stock rose more than 11% overnight, while Apple rose more than 7%.
Analysts pointed out that this move is a major boost for both Affirm and the entire "buy now, pay later" industry. This is because when Apple launched its own installment payment service last year, investors were concerned that the tech giant would squeeze out independent suppliers like Affirm from the market. But Apple's decision to partner with Affirm reflects the competitive advantage that Affirm may have that Apple cannot replicate alone.
Dan Dolev, an analyst at Mizuho Securities, wrote in his research report:
"Affirm has built a competitive advantage that Apple cannot match with its powerful brand influence and advanced risk assessment technology."
At present, the terms of cooperation between the two companies have not been made public. However, the media pointed out that in the past, Affirm's installment payment options were more flexible than Apple's. Apple's own installment payments require users to repay in four installments within six weeks, while Affirm's users can choose repayment plans for up to a year or longer.
In addition, during the epidemic, installment loans for "buy now, pay later" increased in popularity, prompting traditional credit card companies to launch similar services. Thanks to the popularity of the iPhone, Apple Pay now has more than 500 million users worldwide and is a leader in the US mobile payments and digital wallet markets. Apple also announced that it will collaborate with Citigroup, Sanofi, and Fiserv and other issuers to provide installment credit and debit card loan services through Apple Pay in the United States.
Editor/Somer