Affiliate Disclosure
If you buy through our links, we may get a commission. Read our ethics policy.

Competitors are on edge as Apple Pay Later surges in popularity

Apple Pay Later is quickly gaining traction

Since its launch in March, Apple Pay Later, despite still being tested with a small user base, has already surpassed competing brands in terms of usage.

Apple Pay Later was announced in 2022 but faced several delays. However, the company finally released the service to a limited number of customers in March.

Even though it's still limited to select customers, Apple Pay Later has been used by more people than established brands like Sezzle and Zip since its launch, according to a report from J.D. Power. The survey, which involved 8,000 consumers, demonstrates the rapid recognition Apple has achieved in the market.

In just three months since its introduction, Apple Pay Later has been adopted by a staggering 19% of BNPL customers. This swift adoption rate has allowed Apple to surpass well-established brands like Sezzle and Zip.

PayPal retained its top spot as the most-used BNPL brand during this period, with a 39% usage rate, followed closely by Afterpay at 33%.

Among the competition, users of PayPal and Zip were more inclined to experiment with Apple Pay Later than users of other BNPL services. During the survey period, 17% of those who predominantly used PayPal and the same percentage who mainly used Zip indicated that they had tried Apple Pay Later.

Diving deeper into the demographics of Apple Pay Later users, it's evident that they tend to be more financially stable than the average BNPL customer. That suggests Apple might be building a more sustainable user base than its competitors.

Interestingly, in the early days of its BNPL service, Apple also managed to attract a higher percentage of financially overextended users. The higher figure could be attributed to consumers' inherent trust in the Apple brand.

Speaking of the brand, Apple's formidable reputation played a pivotal role in its rapid market capture. Even after facing challenges in 2022, the brand's valuation stands at an impressive $297.5 billion, making it the second most valuable brand worldwide.

Apple's consistent track record of delivering top-tier technology products further bolstered its BNPL service's success. One of Apple's significant advantages in scaling its BNPL service is its existing global user base and widespread merchant acceptance.

Right from its launch, Apple Pay Later was available to millions, thanks to its integration with the Apple Wallet. Moreover, the service is accepted by over 85% of U.S. retailers. Adding to its technological edge, Apple plans to incorporate the BNPL service into its App Store, which boasted over 650 million average weekly visitors in 2022.



12 Comments

mayfly 1 Year · 385 comments

If anyone is still wondering how Goldman Sachs can lose money processing Apple Pay transactions, here's your answer. They have to handle 4 months of payments with nothing but the merchant transaction fee. (Unless you don't pay on time)

mknelson 9 Years · 1148 comments

mayfly said:
If anyone is still wondering how Goldman Sachs can lose money processing Apple Pay transactions, here's your answer. They have to handle 4 months of payments with nothing but the merchant transaction fee. (Unless you don't pay on time)

And what's their cut of the transaction fee? In Canada (Apple Card not availabe) the merchant fee is usually a bit below 2% for Visa and Mastercard and the average interchange fee is dropping below 1% soon.

hmlongco 9 Years · 586 comments

mayfly said:
If anyone is still wondering how Goldman Sachs can lose money processing Apple Pay transactions, here's your answer. They have to handle 4 months of payments with nothing but the merchant transaction fee. (Unless you don't pay on time)

Not really. If we're discussing Apple Pay Later, the buyers makes the first payment at time of purchase, so GS is only "financing" 75% of the transaction. Second, while that might be a cash flow issue, it's shouldn't be a problem unless people don't end up paying the full amount.

Third, GS was complaining BEFORE Pay Later even started. I don't think GS is actually losing money. They're simply not making as much as they normally do since it seems that the majority of Apple Card holders pay off their bills on time. ("deadbeats" in the lingo)

If you build a business that's sustainable ONLY when you extract late fees and the like from your customers, then you're doing it wrong. Regardless, I have little sympathy for them. 

tenthousandthings 17 Years · 1060 comments

Apple Pay and Apple Pay Later are different entities from the Apple Card.

“Apple Pay Later is offered by Apple Financing LLC, a subsidiary of Apple Inc., which is responsible for credit assessment and lending.”

“Goldman Sachs is the issuer of the Mastercard payment credential used to complete Apple Pay Later purchases.”

You are borrowing money from Apple Financing when you get a loan via Apple Pay Later, not Goldman Sachs. It’s the same “Mastercard Installments” BNPL program that Apple uses when you buy Apple products and pay over time using the Apple Card. Those loans at 0% also come from Apple Financing, not Goldman Sachs. 

mayfly 1 Year · 385 comments

Apple Pay and Apple Pay Later are different entities from the Apple Card.

“Apple Pay Later is offered by Apple Financing LLC, a subsidiary of Apple Inc., which is responsible for credit assessment and lending.”

“Goldman Sachs is the issuer of the Mastercard payment credential used to complete Apple Pay Later purchases.”

You are borrowing money from Apple Financing when you get a loan via Apple Pay Later, not Goldman Sachs. It’s the same “Mastercard Installments” bank credential that Apple uses when you buy Apple products and pay over time using the Apple Card. Those loans at 0% also come from Apple Financing, not Goldman Sachs. 

That so? Here's what Apple says about that:


Mastercard and Goldman Sachs
Apple Pay Later is enabled through the Mastercard Installments program, so merchants that accept Apple Pay do not need to do anything to implement Apple Pay Later for their customers. When a merchant accepts Apple Pay, Apple Pay Later will be an option for their customers during checkout online and in apps on iPhone and iPad. Goldman Sachs is the issuer of the Mastercard payment credential used to complete Apple Pay Later purchases.
https://www.apple.com/newsroom/2023/03/apple-introduces-apple-pay-later/#:~:text=Mastercard%20and%20Goldman%20Sachs&text=When%20a%20merchant%20accepts%20Apple,complete%20Apple%20Pay%20Later%20purchases.