Apple device users will soon be able to tap into buy now, pay later loans from Affirm for purchases, the companies said Tuesday. Affirm will surface as an option for U.S. Apple Pay users on iPhones and iPads later this year, the San Francisco-based fintech company said in a filing.
Apple confirmed the news in its own update, providing users with additional payment choices and the ease, convenience, and security of Apple Pay alongside the features users love in Affirm – flexibility, transparency, and no late or hidden fees. This collaboration opens up new opportunities for Apple Pay users to manage their finances more effectively.
The move is a boost to Affirm and the buy now, pay later sector in general, showcasing that Affirm has something unique to offer despite Apple introducing its own BNPL product last year. While Apple’s BNPL loan lets users repay purchases in four installments over six weeks, Affirm provides an array of longer-term offerings that can be repaid over a year or more. This variety in payment options allows users to tailor their repayment schedules to their specific financial situations.
Apple also announced that installment loans via credit and debit cards would be available on Apple Pay in the U.S. with Citigroup, Synchrony, and Fiserv-related issuers. Traditional credit card players have begun offering BNPL-style installment loans, demonstrating the increasing popularity of this payment option. With its widespread use, Apple Pay has gained over 500 million users worldwide and holds a leading market share in the U.S. for its mobile payment and digital wallet platform.
Shares of Affirm rose 5% in late-morning trading on Tuesday, while Apple’s stock was up 6.2%. Despite the positive reception from investors, Affirm acknowledged that it would take time for the partnership to significantly impact its revenue. Affirm stated that it does not expect the collaboration to have a material impact on revenue or gross merchandise volume in fiscal year 2025. This indicates that the long-term benefits of the partnership may outweigh immediate financial gains.
The partnership between Apple and Affirm opens up new possibilities for Apple Pay users and provides Affirm with an opportunity to reach a wider audience. The collaboration showcases the unique offerings of both companies in the buy now, pay later space, emphasizing the importance of flexibility and transparency in payment options. As the partnership unfolds, it will be interesting to see how both companies continue to innovate and adapt to the evolving needs of consumers in the digital payment landscape.