Apple Pay Later is seemingly off to a solid start despite a staggered rollout since its launch in March. A consumer survey spotted by MarketWatch shows that the Apple fintech effort is making strides in the Buy Now Pay Later (BNPL) sector, even coming ahead of dedicated providers in the industry.
The survey was conducted by J.D. Power and included 8,000 participants that used a BNPL service in the last three months. Apple Pay Later was reported to have been used by 19% of surveyed consumers, coming ahead of existing BPNL providers Sezzle and Zip. However, Apple’s offering was still a good distance behind other established players like PayPal and Afterpay, which recorded market shares of 39% and 33%, respectively.
J.D. Power owes Apple Pay Later’s strong performance to a number of factors. The company was able to build upon its strong Apple Pay foundation which is already available at over 85% of all US retailers, allowing it to create an “instant scale” with its BNPL service. In addition, Apple’s brand recognition is leaps and bounds ahead of its competitors, making consumers view Apple Pay Later as more trustworthy than similar services from less-known brands.
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These factors are also helping Apple attract first-time users of BNPL and even those who are seemingly more apprehensive of the concept as a whole. J.D. Power reports that average Apple Pay Later users were more skeptical of BNPL compared to those relying on other BNPL providers. Not only that, but the typical Apple Pay Later user is also in a healthier financial situation compared to other non-Apple BNPL users, meaning that the company is already amassing a “more sustainable user base” than its rivals.
Apple Pay Later attracted the most consumers from PayPal and Zip users. 17% of consumers who primarily rely on PayPal and 17% on Zip said that they were receptive to trying out Apple Pay Later. Apple Pay Later’s appeal to BNPL-cautious shoppers could pose significant challenges for PayPal, as the latter has historically attracted a similar user base. Conversely, Zip, with its predominantly youthful customer demographic and its inclination towards Apple-branded products, may find some of its users gravitating towards Apple Pay Later.
Apple Pay Later launched in March and requires iOS 16.4 or iPadOS 16.4 on a compatible iPhone or iPad. Users who are eligible to use the service can split purchases between $50 and $1,000 into four payments split over six weeks with zero interest and zero fees. Apple Pay Later is available in the US anywhere that Apple Pay is available whether online or in-app.
