Apple launches sales policy buy first – pay later

Here, apple fans will be able to buy products of Apple and pay in 4 installments within 6 weeks through the Apple Pay app without any fees or interest. According to the Wall Street Journal, that will increase competition in the field of installment purchase services.

According to the article, the installment purchase service market has exploded in recent years. The top five service providers in app downloads from the Apple Store or Google Play Store, including Affirm and Klarna, totaled about 7.5 million regular users in May, up 44%. compared to the same period in 2021.

Immediately after Apple announced the service, shares of Affirm Holdings Inc., a platform that provides consumer installment purchases, fell 3%.

An Apple store in Singapore. (Photo: Reuters)

According to the sheet Washington Postthe installment sale method is not new, but it is becoming a current trend and Apple has not been able to stay out of that trend.

The gradual payment of purchases by week or month has been developed since 1840 as furniture, piano and agricultural equipment manufacturers sought to make their products easier for customers to access. . Car companies then continued to push this method to popularity before credit cards were popular.

In recent years, millennials or Gen Z have preferred installment payment methods over credit cards. According to the British Financial Conduct Authority, 25% of users of this service are between the ages of 18-24 and 50% are between the ages of 25 and 36. The reason is that young people are increasingly wary of the way banks offer credit cards that profit from outstanding balances that are not paid on time. They like to control the payment schedule of the installment service, usually 4-6 weeks, at a low cost, even without paying interest.

According to a report by WorldPay, installment methods account for 2.9% of the value of e-commerce transactions globally in 2021, equivalent to 157 billion USD. This rate is expected to increase to 5.3% by 2025.

Europe is currently leading the way with 8.1% of e-commerce spending in 2021. The share in North America is 3.8% in 2021 and is expected to increase to 8.5% in 2025. In the Asia-Pacific region, this share is forecast to reach 1.8% by the middle of this decade, equivalent to $78 billion.

According to the US press, the fact that the installment purchase and sale service has become a prominent trend today is also thanks to the explosion of financial technology companies with convenient online payment applications. The leading companies in this service sector are not very worried about Apple’s participation with the Apple Pay application, because this is a new field and there is still a lot of room for growth.

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