Zip tumbles as Apple enters competitive BNPL space
The buy now, pay later provider’s shares are at their lowest since December 2017.
Australian buy now, pay later providers including Zip have taken a dive on news that tech giant Apple – the world’s second most valuable company – is stomping into their territory.
Apple announced its move into the BNPL space at its WWDC event in San Francisco early Tuesday morning, launching a foray in to the US that is expected to later expand in to other markets including Australia. The functionality will arrive with the next iPhone update, iOS 16, and is built into Apple’s payment system Apple Pay.
As with many other BNPL offerings, customers can split their purchases into equal repayments without paying any interest or fees.
“Users can apply for Apple Pay Later when they are checking out with Apple Pay, or in Wallet,” Apple said in its press release.
“Apple Pay Later is available everywhere Apple Pay is accepted online or in-app, using the MasterCard network.”
Users will be able to pay for instalments over six weeks, with payments managed in the iPhone Wallet app.
ASX-listed BNPL stocks were all down on Tuesday, with investors already nervous amid rising interest rates, more cautious consumer spending, and lay-offs across multiple players including global BNPL provider Klarna, which recently slashed its valuation.
Australian competitor Zip was down 9.5 per cent at lunch time to 69c – its lowest price since December 2017 – after hitting a four-year low of 74.5c on Monday.
The company’s share price is a far cry from its all-time high of $14.53 on February 2021.
“Zip embraces competition,” a Zip spokesman said.
“New players entering the market is great validation that what Zip is doing is resonating. And competition keeps us on our toes to keep delivering great products and services and that can only be a win for customers and merchants,” he said.
Other providers were impacted but not to the same extent. Sezzle was down 3.1 per cent at 47c at lunch time, with Laybuy down 4.3 per cent, Block fell around 2.2 per cent, Latitude dropped 3.3 per cent with Humm down 4.9 per cent.
The ASX 200 index is down nearly 0.9 per cent.
More Coverage
Uber urges Aussies to give up second car to fight climate change
Ride share giant Uber says transitioning to EVs is not enough to slash automotive emissions and congestion as it urges Australians to consider giving up their second car.
Medibank doubles the number of staff who have ‘gift day’
Australia’s biggest health insurer says more staff are “willing to go above and beyond” as part of a new program allowing staff to work four days per week with no loss of pay.