Exploring Affirm’s Partnership with Apple for Buy Now, Pay Later Loans

The collaboration between Affirm and Apple is set to revolutionize the buy now, pay later sector for Apple device users. This partnership will provide additional payment options for U.S. Apple Pay users on their iPhones and iPads, giving them the flexibility and transparency that Affirm is known for.

Affirm’s presence on Apple’s ecosystem indicates that the fintech company has something distinctive to offer compared to Apple’s own BNPL product. While Apple’s BNPL loan allows users to pay in four installments over six weeks, Affirm provides a range of longer-term options that can be repaid over a year or more. This variety in repayment terms sets Affirm apart in the buy now, pay later space.

The integration of Affirm’s services on Apple devices comes as a significant boost to both Affirm and the buy now, pay later sector in general. Concerns that Apple’s entry into the BNPL market would overshadow independent providers like Affirm have been mitigated by Apple’s decision to include Affirm’s offerings. This move suggests that Affirm’s strong brand and advanced underwriting technology provide a competitive advantage that Apple acknowledges.

Apple’s collaboration with Affirm also extends to offering installment loans through credit and debit cards on Apple Pay in the U.S. with partners such as Citigroup, Synchrony, and Fiserv-related issuers. As traditional credit card companies embrace BNPL-style installment loans following the rise in popularity during the Covid-19 pandemic, Apple Pay’s user base of over 500 million globally positions it as a leader in the mobile payment and digital wallet sector.

The announcement of the partnership had a positive impact on the stock prices of both Affirm and Apple, with Affirm’s shares rising 5% and Apple’s stock increasing by 6.2%. Despite this market response, Affirm noted that the partnership’s financial impact would take time to materialize, with no significant revenue or gross merchandise volume expected until fiscal year 2025.

The collaboration between Affirm and Apple represents a significant step forward in the buy now, pay later space, offering users enhanced payment options and highlighting Affirm’s unique value proposition. This partnership underscores the importance of innovation and differentiation in the fintech industry, where competition is fierce but the rewards for those with a distinct offering are substantial.