Bloomberg broke the news earlier this week that consumer hardware giant Apple is now making a purchase with a growing service focus, offering later (BNPL) services that will integrate with its Apple Pay system. The news sent shares of Afarm down just over 10% towards the end and dropped 2.5% of its value yesterday. It is a little over 61% off from the height it set after its debut earlier this year. Investors decided that the former consumer Fintech Unicorn and the current public BNPL Company were worthless in the light of information that could cut Apple’s firm business.
Why? Because the growing competition of players like Apple may limit its growth over time, it will later have an impact on profitability. Or more simply, public-market investors decided that the current value of its future cash flow had declined. Of course, it is not right to focus on epharm. AfterPay is also a government BNPL firm; Shares of Apple have also slipped 10% this week since closing on July 12, the day before the news broke.
These are just two names. From small startups like Clarner to private-market giants, the world-class BNPL has concerns. Efirm and AfterPay, however, create a useful window into how investors’ perceptions of the sector are changing in light of Apple’s recent announcement, as companies focusing on the space that floats. Our question is what effect the Apple News item might have on startups, considering that Apple Pay itself is already responsible for about 5% of global card transactions (at least according to one analysis), I think the answer is that it will be very different depending on the focus of the BNPL startup in question.
The more expert the BNPL supplier, the less likely it is to drive Apple into the BNLL space! The more common BNPL players are, the more likely Apple is to shake up its business. It goes without saying that Ephram, Aftertarpe, and other BNPL players are ready to follow Dodo; Far from it. But if Apple enters the BNPL market as expected, its Apple Pay service could provide a strong distribution network that could make it easier for consumers to operate.