Sharjah24- Reuters: Apple Inc is working on a service that will let users pay for purchases in instalments, Bloomberg News reported on Tuesday, sending shares of Afterpay Ltd and other 'buy now, pay later' (BNPL) companies sharply lower.
The U.S. tech giant will use Goldman Sachs, its partner since 2019 for the Apple Card credit card, as the lender for the loans, Bloomberg reported, citing people familiar with the matter.
Shares of Australia-listed Afterpay, the country's biggest BNPL provider, slid close to 10% in Wednesday trading. Smaller rival Zip Co Ltd and Sezzle also fell sharply. Nasdaq-listed Affirm Holdings Inc tumbled more than 14% on Tuesday before closing down 10.5%.
There was "no doubt the announcements ... would cause the share prices of APT (Afterpay) and Z1P (Zip) to fall ... but the new competition will take some time to play out", said Jefferies analysts in a client note. They said BNPL penetration in the U.S. was just 2% of online sales, suggesting there was room for growth.
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