The Zip Co Ltd (ASX: Z1P) share price was one of the worst performers on the S&P/ASX 200 Index (ASX: XJO) on Wednesday.
The buy now pay later (BNPL) provider's shares ended the day over 11% lower at $7.32.
This was the worst daily performance by the Zip share price since 17 February.
Why did the Zip share price sink?
Investors were heading to the exits in a hurry yesterday amid reports that tech behemoth Apple is planning to enter the BNPL market.
As I wrote here, Bloomberg is reporting that Apple is planning to launch a new offering, Apple Pay Later, with support from Goldman Sachs.
While Apple has declined to comment on the speculation, Bloomberg has reportedly spoken with people involved in the development of the product. It understands that the service will be have similarities to the offerings of both Afterpay Ltd (ASX: APT) and Zip.
Apple Pay Later is expected to allow consumers to buy items in store and online with an interest-free Apple Pay in 4 option and a longer-term option with interest called Apple Pay Monthly Instalments.
Why enter BNPL?
The report explains that Apple is interested in entering the BNPL market to help increase Apple Pay adoption. As Apple takes a cut from transactions made with Apple Pay, increased use would be a boost to its US$50 billion per year services business.
It wasn't just the Zip share price sinking on Wednesday. Given that this news has potential ramifications for the whole industry, it will come as no surprise to learn that Affirm, Afterpay, and Sezzle Inc (ASX: SZL) shares also tumbled significantly lower.
Also weighing on the Zip share price yesterday was news that PayPal is removing late fees for its BNPL service. While nowhere near as unexpected as Apple's news, it highlights just how competitive the landscape is getting in the lucrative market.
One positive, though, is that despite yesterday's decline, the Zip share price is still up 31% year to date.
