Shares in Affirm (NASDAQ:AFRM) to a bit of a bruising today on the news that Apple had finally released its buy now pay later service (BNPL) into the wild for selected borrowers.
At the close of the market, Affirm had lost over 7% but had bounced back a bit by the end of the day. Apple shares were effectively flat.
Apple Pay Later is a BNPL service that is pretty structured as it is only available for charges of up to $1000, split over three payments, during a six-week period. Affirm, on the other hand, has more options, something the online lender quickly touted.
A spokesperson for Affirm shared the following statement:
“More transparent and flexible payment options that can displace credit cards are good for consumers – especially when they have no late or hidden fees. Affirm has offered this for a decade through personalized payment plans with term lengths ranging from six weeks to 60 months. By underwriting every single transaction, we not only empower consumers but help merchants drive growth. The prize remains massive, and Affirm is well-positioned to win.”
The biggest point is that the market is huge, and Affirm is still very widely utilized with more bells and whistles. Fintech pioneer and Affirm founder Max Levchin quickly re-Tweeted his thoughts from last June:
“Splitting payments for small items over a few weeks is the new norm. The future will be won by those who can address the widest range of transactions with the most personalized payment terms. That said — very happy to have another player offering no late fees though!”
While the market is huge and Apple’s lending platform is nascent at best, Apple is planning to offer extended credit at some point in the future. This may be a bigger challenge for other BNPL providers. That and the fact that Apple is inching forward into becoming a neobank with plans to provide a return on cash parked on its platform. Of course, who knows when this service will launch as Apple is well known for delaying products and services until they nail it.