There’s never a slow moment in the buy now, pay later (BNPL) race, or even much of a lull between news events at this point. Just days after Square announced plans to acquire Australian BNPL giant Afterpay, Apple and Affirm broke the latest bit of segment-shaking news, announcing their pair-up to bring BNPL to the Canadian market.
The news partnership, according to reports, will see Apple Inc. collaborate with Affirm’s PayBright to launch a “buy now, pay later” program for Apple device purchases in Canada. The installment payment program that will allow consumers to purchase iPhone, Mac, and iPad products over 12 to 24 months.
And while Apple has had other BNPL moves this summer, this week’s news is the latest advance in a BNPL race that has gone decidedly global over the last seven months. Big players like Visa, PayPal, Citi and now Apple have pushed the installment products into markets like Australia and Canada — markets similar in that they have a high concentration of retail merchants, a technologically sophisticated and adept consumer base and a low concentration of banks with which to compete.
The BNPL race is, as always, shifting and growing larger in its context both in the size of the firms it attracts and the global scale at which it is being carried out.
The Summer Of Global Pushes
Apple’s BNPL push into Canada comes as the latest in what has been a summer full of big names going global when it comes to installment payment products. It’s not the first big player to push a Canadian move: Visa got there first, announcing in early June it is is partnering with Global Payments and Desjardins to offer Visa installment options to consumers, allowing Visa cardholders in Canada an opportunity to jump into the BNPL trend with the card-based payments which which they are familiar. Visa went on to announce as June came to a close that it would be bringing its installment payments to consumers in partnership with two Canadian banks, Scotiabank and CIBC, starting this summer.
“We’ve been watching this trend grow for years, and we’ve developed a solution that is tailor-made for Canadian consumers and merchants,” said Visa Canada Vice President and Head of Product and Digital Brian Weiner in the announcement of the deals.
Visa’s and now Apple’s interest in Canada comes as the BNPL market is rapidly heating up in the country: installments now comprise more than 1.7 trillion Canadian dollars and Canadian adoption has soared by 30 percent in just the last year.
But Canada hasn’t been the only hot spot where the BNPL fire has been burning in the summer of 2021. Installments have shaken up to be an approximately $1.4 trillion in global payment phenomenon, as big names push into that market worldwide to catch the opportunity.
The BNPL Explosion Down Under
Canada has been popular this summer, but Australia is arguably the global birthplace of BNPL — it’s home to Afterpay, Zip Pay, PayRight and others. It has also been very busy this summer as new players have crept into the market.
Earlier this summer PayPal Australia announced its entrance into the buy now pay, later (BNPL) space, introducing its 9 million Australian customers to the PayPal Pay in 4 program — an installment payment offering with no late charge fees and lower minimum purchase thresholds.
“Our business model does not rely on late fee revenues and we believe that many people who miss a payment do so by mistake, not design,” said Andrew Toon, general manager, payments at PayPal Australia.
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And Paypal has not been alone in making an installment payments play down under. Citibank this week announced plans for a BNPL push of its own, getting into the market with its new product called Spot, which is being issued by company subsidiary Diners and will officially launch in October.
Spot is a card-connected offer allowing users to split payments into four interest-free payments at any merchant where Mastercard is accepted. Citi customers will be able to register for Spot before it is publicly rolled out. Retailers can also sign up in advance for partnership opportunities.
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And while Spot is starting out in Australia, Citi has made it clear its ambitions are larger.
“We’re confident that success in the Australian market could lead to a worldwide rollout of the new payment method,” Citi Australia Head of Cards and Loans Choong Yu Lum said in a press release.