The Afterpay Ltd (ASX: APT) share price just had its worst day since February 2021, falling by around 9.6%.
Afterpay wasn't the only one that suffered a big sell off on Wednesday. The Zip Co Ltd (ASX: Z1P) share price also declined by around 11.4%. The Sezzle Inc (ASX: SZL) share price fell a little less than that, dropping by approximately 10.3%.
Apple Pay Later
It is being reported by Bloomberg that Apple and Goldman Sachs are planning to launch a buy now, pay later service that could be a rival to operators like Affirm as well as Afterpay.
Bloomberg said that Apple is working on a service that is internally known as Apple Pay Later. It will mean that consumers can use Apple Pay for any purchase in instalments over a certain amount of time.
It won't be Apple as the lender of the loans, but Goldman Sachs. The two US giants have already been partners with the Apple Card credit card for the last couple of years. But, according to Bloomberg, consumers won't need an Apple Card for the purchases.
What would Apple get out of this? It is reportedly hoped that it would increase the adoption of Apple Pay and lead to more consumers using the iPhone to pay for things instead of their normal payment card. Apple makes money from transactions paid with Apple Pay.
Bloomberg reports that a consumer using Apple Pay Later can either pay for it interest-free across four payments every fortnight, or over a few months with interest.
This will be reportedly available for both in-store and online purchases.
People that want to use this Apple Pay Later service will need to be approved through an iPhone Wallet app application with ID.
Some of these payment plans will exclude late fees and processing fees. It also won't require running a credit check on users, according to Bloomberg.
At this stage, this new service is still in development. The final product could have changes.
Afterpay share price volatility
Investors also learned that PayPal wouldn't be charging late fees.
Despite the heavy decline on Wednesday, the Afterpay share price is still up around 24% over the last two months.
But it has dropped by approximately 33% since the high in February 2021 before it reported its FY21 half-year result.
