Apple’s late-stage entrance to new markets does not always send tremors through incumbents. Buts its reported foray into buy now, pay later has sent the shares of specialists reeling. Afterpay and Zip of Australia and US-listed Affirm all lost about a tenth of their equity value.
It would be no surprise if BNPL piqued Apple’s interest. A touted total addressable market size of $30tn, including global retail, is bunkum. But alluring growth projections are on a sounder footing. Worldpay sees usage doubling, from 2.1 per cent of online payments last year to 4.2 per cent by 2024. Ecommerce group Zalando has even launched its own try first, pay later service.
Size and loyal customers are key advantages. Apple has both. An estimated 500m iPhone users have enabled Apple Pay. That dwarfs the total for Australian rivals. If a fifth of those customers become active BNPL customers, it would put Apple in the same ballpark as Klarna. The privately held Swedish fintech claims 90m active customers, not all of whom use its BNPL services.