Buy now, pay later (BNPL) is nothing new. Companies like Affirm and Klarna have allowed consumers for years to take out loans at the point of purchase. However, this concept is picking up interest as consumers are faced with rising prices and economic uncertainties. Per recent CivicScience data, a large percentage of consumers are currently using BNPL services to purchase groceries to combat inflationary prices. In the latest news, Apple announced plans to enter the BNPL arena with Apple Pay Later, which could further generate interest in this type of service.
With Apple Pay Later, Apple Pay users can split online and in-store purchases into four payments over the course of six weeks with no additional fees or interest. Once approved for a loan, consumers can use Apple Wallet to manage payments.
Even though these features aren’t fully available yet, BNPL service Affirm saw its shares drop 7.3% upon Apple’s announcement, and competitor sites like Klarna and Afterpay could potentially lose some of its customer base to Apple. So, how likely are consumers to use Apple Pay Later, and will they use Apple’s BNPL service over another one?
The latest CivicScience data show that 14% of U.S. adults are likely to use Apple Pay Later, with 5% making up those ‘very likely’ to use it (n= 4,241). However, 6-in-10 are ‘not at likely’ to try it, and just over a quarter are unfamiliar with the Apple Pay feature. Two percent of respondents report they’ve already tried it, which is in line with sources suggesting that “randomly selected” users can access it early.
With many other BNPL services to choose from, the data show that 13% of U.S. adults are at least ‘somewhat likely’ to choose Apple Pay Later over a competing service (Affirm, Klarna, etc.), and just more than a third are ‘not at all likely’ to do so. Meanwhile, under a third report they don’t use BNPL services, and 21% are unfamiliar with this service, which means Apple could potentially fill more ‘likely’ seats.
Among those familiar with Apple Pay Later and who use BNPL services, younger Gen Z adults aged 18-24 show the highest likelihood of switching to Apple Wallet’s newest feature (55% report they’re at least ‘somewhat likely’ to switch). Adults aged 25-34 are also likely to make the switch — 46% report they’re likely to do so. Meanwhile, adults 35+ are less than half as likely to use Apple Pay Later over another BNPL service.
Looking specifically at consumers who own an iPhone, nearly one-third of iPhone users are likely to use Apple Pay Later over another BNPL service (32%). Interestingly, iPhone intenders are even more likely to make the switch (57%). Meanwhile, adults uninterested in purchasing an iPhone show a corresponding disinterest in Apple’s newest offering.
In other findings, consumers who report they’re not satisfied with their credit score over the last year are much more likely to switch to Apple Pay Later compared to those satisfied with their credit score. Additionally, those ‘very likely’ to use Apple Pay Later over another BNPL service are the most likely to say they prefer tapping their credit or debit card when making in-store purchases and the least likely to swipe or insert their card at checkout.
Want more BNPL insights like these, or want to know how your consumers feel about Apple Pay Later? Get in touch.