What you need to know
- Apple Pay Later will allow people to pay for purchases over six weeks.
- Affirm's CEO isn't concerned about Apple's entry into the market.
- The CEO thinks Apple will help drive the adoption of pay later services.
Affirm CEO Max Levchin says that he isn't worried that Apple's upcoming buy now, pay later feature will impact his own business. Apple announced that iOS 16 will allow people to spread the cost of Apple Pay purchases over four fortnightly payments.
In an interview with Bloomberg, Levchin said that he believes his own company still has plenty of room to grow, even with Apple Pay Later getting involved.
"I don't think there's much concern," Levchin said Tuesday in an interview on Bloomberg Television. "There's a lot of room for growth for all involved." Buy now, pay later is used for fewer than 5% of US transactions, he said.
While Apple will allow people to make payments over a six-week period, Affirm offers more credit options from six weeks to five years. In fact, Levchin believes that Apple's entry into the pay later market is good for his company, saying it creates a "tailwind" that will help make customers aware that paying later is an option. It's possible customers will want to pay over a longer period and choose Affirm instead.
This mimics a response from Klarna CEO Sebastian Siemiatkowski who notes that "plagiarism is also the highest form of flattery." He too belives that Apple's entry is a win for customers.
Apple's new pay later service will not incur any fees or interest, but customers will need to wait until this fall to use it. The Apple Pay Later service will be part of iOS 16, an update that was announced during the WWDC22 opening keynote on Monday. While available to developers in beta form, it won't be ready for the public until later this year.
