Apple is testing a buy-now-pay-later (BNPL) service for a select group of US users, as the BNPL market continues to be one of the fastest growing areas in payments technology.
Apple plans to roll out the service to eligible users over the coming months.
Apple-Pay-Later will allow customers to split the cost of purchases between $50-1000 into four payments, spread over six weeks and with no interest or fees.
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The service will be built into the Apple Wallet app, where users can make purchases online made on iPhone and iPad with merchants that accept Apple Pay.
GlobalData predicts that global mobile payment transaction value will grow at a compound annual growth rate of of 21.8% between 2021 to 2025, reaching $122.5tn by 2025. Mobile payment volume will also grow significantly, at a compound annual growth rate of 19.9% between 2021 and 2025 reaching 2.2 billion payments by 2025, according to the analyst.
However, the BNPL sector has been able to grow rapidly and provide credit services to consumers without regulatory oversight, so far, according to GlobalData.
BNPL has the potential to allow consumers to accumulate unsustainable debt. For this reason, the analyst warns that regulators are likely to impose regulations on BNPL companies which have been hitherto operating an a relative regulatory vacuum. Greater regulation is likely to reduce the rapid growth the sector has seen over the last two years.
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By GlobalDataOlga Karablina, head of payment product development at Ecommpay told Verdict, “Almost daily, we see the emergence of new BNPL service providers and an increase in demand for this popular purchase method.” A recent Ecommpay survey revealed that over 33% of respondents will likely remove items at an online checkout if a BNPL option isn’t offered.
Karablina says it was only a matter of time before Apple entered the BNPL market segment, hot on the heels of US fintech giant PayPal.
