Apple to launch BNPL service with Goldman Sachs
Apple Inc is working on launching its own By Now Pay Later (BNPL) scheme in collaboration with Goldman Sachs.
According to reports, news of the move has sent BNPL providers shares plummeting, as the US technology giant moves into a new area of fintech services. Fiscal data shows Afterpay Ltd, Zip Co, and Sezzle were all affected by the announcement.
BNPL US growth potential for Apple
Called Apple Pay Later, the BNPL play will be available for all Apple Pay purchases made with any card as well as being linked to the Apple Card.
The news puts Apple in direct competition with a number of firms BNPL that have enjoyed the market boom since services took off a few years ago.
A recent Bloomberg report on the news stated that Apple Pay users would divide their installments into four, interest-free payments - with the option of extending the payback time to several months with added interest. But both Apple and Goldman Sachs are yet to make an official comment on the subject.
A statement from Jefferies analysts noted that BNPL penetration in the US market currently amounts to just 2% of online sales, providing ample opportunity to expand the services.
The BNPL boom has been exacerbated by the pandemic and the boom in online sales, as well as customers seeking more flexible payment options. It has also attracted the attention of mainstream firms such as PayPal.
The entry of Apple into the BNPL space will crank up the competition for smaller operators in a sector where dedicated BNPL firms such as Klarna, Quadpay, and Affirm are already jostling for positions.
Paypal BNPL services
The news also follows on from Paypal’s launch earlier this week of its own BNPL services in Australia. Paypal has openly challenged the sector by not charging late fees, an element that earned other operators such as Afterpay, an estimated AUS$70mn in 2020.
A spokesperson for Afterpay issued a statement on the company’s behalf, saying, "many BNPL players, each of which operate a different model and generate revenue in different ways" while "competition reinforces the significance of the sector".
Reuters also reported a reaction from Zip which said the move by Apple was simply a "validation that what Zip has been doing is resonating with customers and merchants.”
Nymbus enters strategic partnership with Plaid
Nymbus, a leading provider of banking technology solutions, has partnered with Plaid, a data network powering the digital financial ecosystem, to more instantly authenticate and fund customer bank accounts for financial institutions.
This new integration will allow Nymbus bank and credit union clients to securely onboard new users in a matter of seconds, which in turn translates to more active and engaged banking experiences. Plaid’s data network enables consumers to connect their financial accounts at over 11,000 institutions globally to more than 5,000 digital finance apps, including leading payments, investing, and budgeting tools.
What are the benefits of the integration?
Benefits of the Nymbus and Plaid integration for financial institution customers include:
- Improve user identity verification and reduce fraud.
- Instantly authenticate and link members’ bank accounts.
- Streamline ACH transfers between any bank or credit union in the US.
- Access and analyse comprehensive transaction data.
- Validate real-time account balances to protect against overdraft and enable account pre-funding.
“As more consumers than ever before rely on digital finances for their everyday lives, financial institutions need to meet their customers where they are while supporting safe and reliable money management experiences,” said Sarah Howell, Chief Alliance Officer at Nymbus. “Our expanding network of partners are important contributors to Nymbus’ combined portfolio of the technology, people and process available to quickly innovate with new routes to market and revenue streams.”
Continuous growth and expanding partnerships
Founded in 2015, Nymbus has continued to grow. Most recently the company has closed a new round of financing led by the Curql Fund. The US$5 million investment will be used towards Nymbus CUSO and accelerate a shared commitment to breakthrough technology for ensuring continued growth and stability for the credit union community.
Nymbus CUSO was founded in March 2021 to help break through barriers to growth, and its mission is to connect credit unions with trusted fintech offerings that both simplify technology delivery and enable new digital revenue opportunities.
Last year Plaid set a goal to move 75% of its traffic to APIs by the close of 2021, calling it “one of our top priorities as the industry moves full-steam ahead toward a fully digital financial system.”
Recently it has announced an open finance partnership with Capital One, a digital finance innovator, and the successful completion of its migration to the Capital One API. They have also completed or have in-motion data access agreements with major US financial institutions, including U.S. Bank, JPMorgan Chase, Wells Fargo, and others.